With the criminalisation of wage theft set to take effect in Australia from January 2025, Small Business will be under immense pressure to clean up their payroll processes– but many don’t realise how prevalent the issue really is.
Insights from Rippling’s research earlier this year highlighting the scale of the problem:
- 59% of Australian companies admitted to payroll errors in the past two years.
- Nearly half (48%) of these errors involved under- or overpaying employees, and 44% were due to delayed payments—often unintentionally.
- Over half (52%) of payroll managers believed new Industrial Relations laws would add even more complexity and stress to their already strained processes.
- Almost two-thirds (63%) of companies employ three or more solutions to handle HR and payroll, and over a third (37%) use five or more—significantly increasing the risk of errors.
These findings expose a hidden compliance risk for Australian SMEs, especially as the new legislation introduces harsh penalties for wage theft, regardless of intent.
Matt Loop, VP and Head of Asia at Rippling, says: “The criminalisation of wage theft from January 2025 will be a wake-up call for all Australian businesses. While deliberate underpayment has rightly drawn scrutiny, our research reveals that accidental payroll errors are alarmingly common, affecting nearly 60% of companies in the past two years.
Adding to the challenge, many SMEs still rely on fragmented, siloed systems to manage payroll. This not only complicates operations but significantly increases the risk of errors— heightening the potential for non-compliance under the new laws.
The urgency for businesses to modernise their approach cannot be overstated. Technology offers a practical solution, helping to streamline and automate processes, reduce human error, and ensure compliance. But this is about more than just avoiding penalties. Accurate and timely pay builds trust with employees, strengthens workplace morale, and fosters accountability.”