Insight

Stages of a payroll remediation project – Stage 4 Remediation for employees

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

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
  5. Dealing with regulators  

In the previous article, we discussed the third stage of a payroll remediation project: Issue Rectification. We explained key steps including identification of the root cause, system and process changes, training for payroll staff and ongoing audits.  

In this article, we will cover the fourth stage of a payroll remediation project: remediation for employees.

Why is remediation for employees important?

Remediation for employees is not only a legal obligation, but also a moral and ethical one. Underpaying employees can have serious consequences for their financial well-being, trust, and engagement. Employers who fail to remediate for employees may face penalties from the Fair Work Ombudsman, legal action from employees or unions, reputational damage, and loss of talent.

The remediation process

The process of remediating for employees may vary depending on the nature and extent of the underpayments, but generally involves the following steps:

Communicate with employees

Companies should inform employees about the payroll recalculation outcomes as soon as possible, explain how underpayments will be paid back, and how future errors will be prevented. Employers should also show contrition by apologising and thanking employees for their patience and cooperation. Communication should be clear, honest, and empathetic, and allow 

Obtaining bank details and processing payments

If former employees need to remediated, they should be contacted to obtain current bank account details. Employers should then pay back the underpaid amounts current and former employees as soon as possible.

Provide information and documents to employees

Companies should support their communication with information and documents. This may include payslips or statements, amended payment summaries, letters or notices. Companies should also advise employees to seek financial or tax advice if needed.

Address issues or concerns from employees

Companies should also address any issues or concerns from employees. This involves setting up a dedicate email and phone hotline to respond to questions from employee. This hotline could be used to clarify misunderstandings or errors, resolve disputes or grievances or providing additional information.

Companies need to comply with any orders or directions from regulators with respect to remediation. We will discuss dealing with regulators in more detail in the next and final article in the series.

How can Grant Thornton help?

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

  • Design and implement a communication strategy;
  • Set-up and management of a hotline to address questions from employees;
  • Set-up of an online portal to collate bank account details for former employees;
  • Grant Thornton can also provide specialist tax advice on remediation payments. This may include advising on income tax, payroll tax, superannuation guarantee charge issues, preparing and lodging amended tax returns or activity statements

If you need help with remediating for employees, please contact us today. We can help you restore trust and confidence with your employees, and ensure you are paying them correctly and fairly.

Stages of a payroll remediation project – Stage 3 Issue Rectification
Stages of a payroll remediation project – Stage 3 Issue Rectification
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TAGS
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 Mintz is a Senior Manager, Financial Advisory at Grant Thornton Australia.

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