[Australia] Two in five SMEs admit payroll errors

According to new research, nearly 40 per cent of small businesses in Australia admit to making a payroll error in the past two years, SmartCompany reports.

The data - from workplace management platform Rippling - highlights the compliance challenges facing local businesses, at a time when wage theft criminalisation rules are pending.

Rippling reportedly stated that 39 per cent of respondents had acknowledged a recent payroll error in its survey of 150 payroll managers at businesses with between 5 and 49 employees.

Under- and overpayment was the most common type of payroll error, at 57 per cent. The data did not detail how many businesses specifically admitted underpayments.

A further 27 per cent acknowledged making late payments; 17 per cent said payment errors resulted from the misgrading of an employee; while 8 per cent revealed they had missed superannuation payments due to their workers’ super funds.

The results come months after the first Closing Loopholes legislative package passed into law and cleared the way for wage theft criminalisation at the federal level.

The changes will not come into effect before January 1, 2025. Small businesses adhering to a voluntary code of compliance - currently under development - will avoid criminal penalties in underpayment investigations.

However, the Rippling data points to a glaring gap between today’s regulatory framework and the actual performance of many small businesses.

In a statement, Matt Loop - Rippling’s VP and head of Asian operations - said, “Payroll errors can be hugely detrimental to employee morale and damage company reputation, so it’s imperative that companies do all they can to limit the risk of human error taking place.”

Rippling reportedly claims that its all-in-one payroll, HR, IT, and finance platform will be able to shepherd business users through Australia’s complex regulatory environment and adapt to changes such as the incoming wage theft criminalisation reforms.

That help might be needed, as the Rippling data also shows two in five small businesses struggle to keep up with changing legislation and compliance obligations.

According to SmartCompany, Rippling’s promise has been disputed.

Ben Thompson - Employment Hero CEO - reportedly said that American-based newcomer Rippling would struggle to adapt to Australia’s complex employment rules and frameworks.

SmartCompany reportedly contacted Loop for further comment on the data.

Source: SmartCompany

(Links and quote via ordinal reporting)

According to new research, nearly 40 per cent of small businesses in Australia admit to making a payroll error in the past two years, SmartCompany reports.

The data - from workplace management platform Rippling - highlights the compliance challenges facing local businesses, at a time when wage theft criminalisation rules are pending.

Rippling reportedly stated that 39 per cent of respondents had acknowledged a recent payroll error in its survey of 150 payroll managers at businesses with between 5 and 49 employees.

Under- and overpayment was the most common type of payroll error, at 57 per cent. The data did not detail how many businesses specifically admitted underpayments.

A further 27 per cent acknowledged making late payments; 17 per cent said payment errors resulted from the misgrading of an employee; while 8 per cent revealed they had missed superannuation payments due to their workers’ super funds.

The results come months after the first Closing Loopholes legislative package passed into law and cleared the way for wage theft criminalisation at the federal level.

The changes will not come into effect before January 1, 2025. Small businesses adhering to a voluntary code of compliance - currently under development - will avoid criminal penalties in underpayment investigations.

However, the Rippling data points to a glaring gap between today’s regulatory framework and the actual performance of many small businesses.

In a statement, Matt Loop - Rippling’s VP and head of Asian operations - said, “Payroll errors can be hugely detrimental to employee morale and damage company reputation, so it’s imperative that companies do all they can to limit the risk of human error taking place.”

Rippling reportedly claims that its all-in-one payroll, HR, IT, and finance platform will be able to shepherd business users through Australia’s complex regulatory environment and adapt to changes such as the incoming wage theft criminalisation reforms.

That help might be needed, as the Rippling data also shows two in five small businesses struggle to keep up with changing legislation and compliance obligations.

According to SmartCompany, Rippling’s promise has been disputed.

Ben Thompson - Employment Hero CEO - reportedly said that American-based newcomer Rippling would struggle to adapt to Australia’s complex employment rules and frameworks.

SmartCompany reportedly contacted Loop for further comment on the data.

Source: SmartCompany

(Links and quote via ordinal reporting)