20pc of employers suspect they’re paying staff wrongly, Yellow Canary survey suggests

Scores of bosses in finance, telecommunications and construction could be at risk of jail time and huge penalties, a survey suggests, as wage theft is criminalised in Australia.

Yellow Canary’s survey found that about 40 per cent of payroll bosses were concerned the new wage theft laws would increase their administrative burden.

Scores of bosses in finance, telecommunications and construction could risk jail time and million-dollar penalties, a survey suggests, as wage theft is criminalised in Australia.

A little more than half the companies surveyed by payroll software business Yellow Canary are confident they have paid their employees correctly, while 17 per cent are unsure and 19 per cent suspect there is an issue.

One third of respondents confirmed there had been a payroll issue in the past that they believe had been corrected, while 22 per cent had recently identified an issue and were in the process of correcting it.

On January 1, the Albanese government’s new legislation made wage theft a crime, punishable with up to 10 years jail and with fines of up to $1.65m for individuals and $8m for companies.

The government has promised that the penalties would be reserved for companies and individuals that had intentionally underpaid staff and that it would not target employers who had made an honest mistake.

Yellow Canary’s survey found that about 40 per cent of payroll bosses were concerned the new wage theft laws would increase their administrative burden.

The survey, which quizzed payroll bosses across 533 companies with between 50 and 5000 employees, was conducted by Lonergan Research on behalf of Yellow Canary.

Its founder and managing director, Marcus Zeltzer, said his firm had found that underpayments represented 1-3 per cent of total headcount costs, “a figure that underscores the importance of investing in robust compliance frameworks”.

“Our research … reveals that while many businesses are making payroll compliance a top priority, a significant number are still relying on flawed manual processes or have not conducted thorough reviews,” Mr Zeltzer said.

About 39 per cent of companies claimed keeping up with legislation was the most confusing when it came to paying the correct wage, 32 per cent claimed they struggled to make time for payroll audits and 29 per cent said they struggled to interpret modern awards.

Most payroll audits – about 40 per cent – were conducted quarterly, according to the survey, while about 30 per cent of respondents conducted audits monthly and 20 per cent annually.

About 7 per cent of respondents only conducted audits when they suspected there was a problem, 2 per cent said they did not conduct audits because they used software that made them compliant, and 1 per cent said they had never conducted an audit.

About 56 per cent of companies surveyed were already using payroll auditing technology, while just less than a quarter – or 22 per cent – were planning to implement the tech in 2025 to ensure they were compliant.

Some 48 per cent of respondents said payroll compliance was now a top priority, 47 per cent said they had conducted a thorough review of their payroll process and 39 per cent have implemented new strategies to prevent underpayments.

Some leaders were looking to new technologies including artificial intelligence, which 30 per cent believed would help them maintain compliance.

But a larger number of payroll bosses, about 41 per cent collectively, were uncertain or sceptical about the use of AI in payroll or believed it would only introduce more challenges.

Originally published as 20pc of employers suspect they’re paying staff wrongly, Yellow Canary survey suggests