Insight

Stages of a payroll remediation project – Stage 3 Issue Rectification

By:
Alex Bell,
Troy Wilson,
David Mintz
24 Jan 20244 min read
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This article is the third in a series where we discuss the stages of a payroll remediation project.

In our first article, we identified the following five significant stages for companies and their legal advisors to consider:

  1. Risk Review;
  2. Recalculation;
  3. Issue rectification;
  4. Remediation for employees; and
  5. Dealing with regulators.

In the previous article we discussed the second stage of a payroll remediation project: recalculation. We explained key considerations we take into account including the scale of a recalculation, sample size, data quality, system limitations, and legal interpretations.

In this article, we cover the third stage of a payroll remediation project: issue rectification.   

What is payroll issue rectification?

Payroll issue rectification is the process of fixing the root causes of the underpayments and implementing changes to prevent future errors or non-compliance.

This is a crucial step to restore trust and confidence with employees, and to avoid penalties or legal action from regulators or stakeholders. By rectifying the root causes of the underpayments, you can ensure you are paying employees correctly and fairly, and meeting your legal and contractual obligations. This can also reduce the costs and complexities of payroll administration and increase the productivity and satisfaction of your payroll staff.

How to rectify payroll systems and processes?

Rectifying payroll systems and processes generally involves the following key steps:

Conducting analysis to identify the root causes of any underpayments which may include incorrect application of industrial instruments, inadequate payroll systems or processes, insufficient training or supervision of payroll staff, or lack of regular checking or auditing of payroll records.

Implementing changes to address the underpayment causes and ensure accuracy on a go-forward basis which may include updating or replacing payroll software or hardware, modifying or automating payroll calculations or workflows, enhancing data quality or security, or streamlining payroll policies or procedures. It is important to document any changes for future reference.

Training should be provided to payroll staff on using and maintaining the updated systems or processes, and applying entitlements correctly.

Conducting ongoing reviews to ensure employees are being paid correctly and relevant laws and agreements are complied with which may include checking pay rates and entitlements against industrial instruments, verifying hours worked and leave, and sample recalculations of entitlements. It’s vital to monitor any changes in legislation affecting your payroll obligations and seek legal advice where necessary.

How can Grant Thornton help?

Grant Thornton has extensive experience and expertise in assisting employers with payroll rectification projects. We can help you with:

  • Identifying and addressing the root causes of the underpayments;
  • Implementing changes to your payroll systems or processes;
  • Providing training or support to your payroll staff; and
  • Conducting payroll reviews or audits.

If you need help with rectifying your payroll systems or processes, please contact us today. We can help you prevent future wage underpayments, and ensure you are paying your employees correctly and fairly.

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Authors
  • Alex Bell
    Alex Bell Alex Bell is a highly experienced forensic accountant, with over 20 years in forensic teams in Australia and the UK. View Profile
  • Troy Wilson
    Troy Wilson Troy works with technology to develop taxation solutions for clients. His work includes data transformation, automation and de-risking of tax processes, in addition to developing business intelligence dashboards and taxation applications. View Profile
  • David Mintz
    David Mintz David is an experienced forensic accountant, with 8 years’ experience in forensic teams in Australia. David has worked in the Australian Taxation Office’s Financial Crime division where he had case ownership of audits in the organised crime space. David joined Grant Thornton in March 2017 and specialises in expert witness work, financial investigations and payroll recalculations.

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