Many organisations are grappling with a myriad of employee agreements and obligations, resulting in a wide variety of payments to their people.

In recent times, there has also been much media scrutiny around businesses not paying their people correctly. In 2019 alone we saw a major media outlet, a major airline, many retailers and restaurants, a Not for Profit, a Big 4 bank and a law firm with examples of underpaying some of their people.

In our experience, the causes of underpayment and incorrect payments of overtime wages and superannuation are not because of intentional behaviour, rather it is typically a case of complex awards and EBAs, the lack of routine payroll data validation and failed processes unable to spot red flags.

The Federal Government is also attempting to encourage a proactive approach to spotting superannuation shortfalls through a proposed amnesty that would waive much of the penalty that would otherwise apply.

In order to pay your people correctly, maintain your reputation and minimise Government penalties, businesses must proactively assess and test their application of their industrial relations obligations. Grant Thornton helps mitigate your risk and provides the level of assurance you need to meet your employee obligations now and into the future.

Read more about how Grant Thornton is helping clients with their pay assurance review, through our Pay eView service. [ 438 kb ]

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Elizabeth Lucas
Partner & Head of National Specialist Tax
Elizabeth Lucas
Learn more about Elizabeth Lucas
Elizabeth Lucas
Partner & Head of National Specialist Tax
Elizabeth Lucas

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Elizabeth Lucas

Proactively assuring payroll practices and brand reputation in an international M&A

Client challenge
When a global listed company undertook an international acquisition, it inherited a small Australian subsidiary of another global company. A range of post-acquisition reviews were then undertaken to ensure a successful amalgamation. In doing so, inconsistencies were identified around how the two businesses paid their people. Specifically, relating to the hourly pay rates between employees of the two Australian companies. The Fair Work Ombudsman is cracking down on employers who have not taken due care in how they pay their employees. Therefore, to maintain both brands’ reputations, minimise government penalties and ensure a smooth and successful transition, Grant Thornton was engaged to assess and test their application of their industrial relations obligations.
The solution: Grant Thornton’s Pay eView
The team – led by the firm’s forensics and tax experts, backed by dedicated-technology for data analytics and automation – undertook a confidential review. It included reviewing salary and wage payments spanning a seven-year period for the acquired company, which was subject to numerous complex award arrangements impacting each individual employee. The team also advised on all statutory obligations, overseeing the disclosures and reporting to relevant authorities on the back of the findings.
The outcome
There were numerous employment agreements, awards and EBAs relating to their workforce being managed by a legacy payroll system, combined with a lack of routine payroll data validation. Our analysis spotted examples of significant under-reporting of salary, wages and superannuation. Our team, also skilled in disputes relating to payroll assurance risk, helped the client to proactively escalate their issue by obtaining legal advice, further minimising the impact of their payroll discrepancies. This reduced the overall liability by more than $100,000.
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Whistleblowing and payroll assurance: minimising the risk to, and impact on, your business

Client challenge
After European investors acquired a controlling interest in an Australian fashion retailer, contractual disputes resulted in employees blowing the whistle on potential underpayments of salary and wages and superannuation to authorities. The organisation needed to respond immediately and effectively to rectify the issue internally, but also to ensure they were meeting their obligations as set out by the Fair Work Ombudsman, given its crack-down on employers who have not taken due care in how they pay their employees.
The solution: Grant Thornton’s Pay eView
Grant Thornton – led by the firm’s forensics and tax experts, backed by dedicated-technology for data analytics and automation – was engaged to undertake an immediate confidential review of claims, including quantification of under-reporting and liaising on behalf of the company with relevant statutory authorities to mitigate financial and corporate risk. The complexities of the review were due to the scale – involving some 100 plus employees – and the breadth employee arrangements, awards and EBAs, as well as multiple time recording processes.
The outcome
The team was able to apply a full and comprehensive review covering all bases: focusing on statutory requirements at play for this organisation and its people, spotting exposure points, and developing compliance and mitigation controls. This was combined with the support of data analytics and automation tools for accuracy and efficiency. Importantly, the team is skilled in disputes advice, and was able to work with the relevant statutory authorities, mitigating the penalties based on the examples of underpayment discovered, as well as minimising resulting reputational damage given the speed of rectification.
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