REA Group investigating potential staff underpayments

News Corp-controlled real estate listings portal REA Group has ordered an urgent review into its payroll over concerns some staff members may not have been paid the right amount in commissions.

REA, which announced a record interim dividend payment on Friday, wrote to staff on the same day to inform them consultancy KPMG was reviewing payments over concerns that provider Ascender had not remunerated staff properly by miscalculating tax.

REA Group has hired KPMG to conduct an urgent review of its payroll.Credit: Realestate.com.au

Industry sources familiar with the matter, who requested anonymity, said the KPMG review will assess pay from July 2021 until now. The scale of potential underpayment is unclear.

“We recently informed a small number of REA employees that they had been impacted by a payroll issue where our external pay provider, Ascender, did not deduct the appropriate amount of tax from some payments,” an REA spokesperson said. “We are working with Ascender to efficiently rectify this. We take matters like this very seriously and have engaged KPMG to conduct a thorough third-party review.”

REA Group is not the only media company to review its payments in recent years over concerns it had underpaid staff. National broadcaster the ABC was embroiled in multiple underpayment scandals over the past few years. Large Australian companies such as Australia Post, Woolworths, Commonwealth Bank, NAB and Coles have also been accused of widespread staff underpayments.

The “urgent” review was announced to staff on the same day that the real-estate listings group reported a 27 per cent increase in the first half of the financial year to $368 million and a net profit increase of 31 per cent to $226 million. The growth was attributed to a bounce back in consumer confidence due to the end of lockdowns in Victoria and NSW.

The results included the consolidation of REA India and Mortgage Choice. Excluding the acquisitions, earnings (before interest, tax, depreciation and amortisation) grew 27 per cent and net profit climbed 33 per cent. Revenue was up 37 per cent to $590 million. Mr Wilson said bank liquidity, low interested rates and the forecasted low unemployment rates would keep the market strong.

REA Group shareholders will receive an interim fully franked dividend of 75.0 cents per share - a 27 per cent increase on the prior year.

Mr Wilson appeared unfazed by plans outlined by former Domain boss and regional media executives, Antony Catalano, who confirmed he was hoping to list challenger listings portal Real Estate View on the ASX by the end of this financial year. The board of Real Estate View unanimously supported an increase Mr Catalano’s stake to 72 per cent last week, paving the way for an eventual takeover.

“We welcome to the competition,” Mr Wilson said. “Frankly, it keeps us on our toes. Real Estate View has been around for a while, so I don’t think being listed will change their position in the market.

“If you look at the audience numbers, between us, the number two Domain...it’s a fairly long way back for the other players who are in the market. But Catalano has been around for a long time with Domain and now Real Estate View. He knows the market very well. He’ll be really competitive, that’s for sure. We welcome the competition.”