Salary underpayments are adding to Australian workers’ financial burden, as they struggle with rising inflation and increasing cost of living expenses. Two in three workers (64 per cent) are still experiencing underpayment issues, according to new data from global payroll and HR provider ADP – up from one in two just 12 months prior.

Findings from ADP’s annual People at Work 2022: A Global Workforce View, a survey of 1,400 workers in Australia, also found that one in nine workers (11 per cent) have reported that they are ‘always’ underpaid by their employers. Worryingly, this represents a doubling in underpayments in the last year alone. Additionally, over half of workers surveyed have experienced other underlying issues with their pay (57 per cent), such as failed payments or incorrect tax codes.

Australia’s growing underpayment issue is worsened by a reported lack of action from employers to correct payments quickly. More than 6 in 10 workers (61 per cent) say their employer has failed to resolve their underpayment issue within the next pay cycle.

Irina Shainsky, Legal Director ANZ at ADP, said, “At a time when inflation and the cost of living is at an all-time high, more and more Aussie workers are finding it difficult to pay their rent, bills, and basic necessities.

“It is more important than ever that employees are closely reviewing their pay and having conversations with their employers if issues arise. Employers have a responsibility to ensure they have the right systems in place to address payment issues.”

Issues with payments do not only affect employees, but have significant impact on businesses.

“Incorrect and late payments have the potential to create cash flow and staff retention issues for employers. These can also have knock-on effects on a business’ reputation,” says Ms Shainsky.

“Higher inflation impacts consumers and businesses alike. Organisations are struggling with higher inflation and increased costs across the board. As a global recession looms, their commercial success will depend on their ability to track and review business expenses as early, efficiently and accurately as possible.

“With States starting to legislate against wage theft, the focus has increasingly shifted to businesses’ legal obligations when it comes to correct payments. Employers must be aware of all relevant legislation to ensure they are compliant,” adds Ms Shainsky.

To help manage the complexity of pay, businesses are increasingly turning to integrated technology solutions to essentially ‘outsource’ payroll services. These technology solutions can help businesses pay their employees accurately and on time, while also having access to a secure portal to easily manage reporting and compliance.

“Employee salary underpayments have wide ranging implications on the Australian workforce and businesses alike, especially in the current financial climate. It’s imperative that companies source the expertise and tools required to address this issue to ensure their longevity as cash flow and employee retention continue to increase in importance for businesses,” concludes Ms Shainsky. For more information on ADP’s payroll and HR software solutions, go to au.adp.com.