auditing and compliance
Payroll auditing services
Issues surrounding payroll compliance continue to be widely reported and are a priority for the Fair Work Ombudsman. Payroll non-compliance includes instances of underpayment of wages, as well as failure to meet superannuation guarantee obligations and non-compliant record keeping.
Payroll is a challenging compliance area for businesses. The accuracy of payments is subject to correct application and interpretation of the relevant Modern Award or Enterprise Agreement, accurate timesheet records, and a range of other factors. Even small errors in data entry, when extrapolated over time, can add up to significant back payments.
A climate of fear and secrecy has developed around payroll non-compliance, with the media sensationalising cases. In an ideal world, payroll systems would be perfect and there would be no human error. Unfortunately, that is not reality. Deliberate mispayment, “wage theft” is a different matter to an accidental underpayment. The Fair Work Ombudsman will take this into account, as do the state laws that have been enacted regarding wage theft.
It is generally expected that businesses take proactive steps to regularly audit and review payroll data and processes to ensure compliance. It is not enough to respond once you are aware there ‘might be’ an issue. This is no longer a responsibility that simply falls to payroll or finance more broadly, it is a shared responsibility between human resources and finance functions, with ultimate responsibility sitting with the Chief Executive Officer and Board Directors.
The best way to ensure compliance and achieve peace of mind is to have an external assessor conduct an audit. That audit should examine payroll and time and attendance records for all employees over several years as a minimum. If the final report is unable to drill down to the level of the employee and shift, the audit is not thorough enough to properly uncover any errors. Having looked historically and remediated any issues, it is important to implement a regular process of monitoring so that small checks are done frequently, and any issues are quickly identified. How frequently the ongoing assessments are conducted will depend on the unique circumstances of your business, and they could range from quarterly to annually.
As experts in industrial relations, the team at Red Wagon is best placed to support you with compliance. We will assist you to confirm the application of the correct industrial instrument and conduct a thorough classification review. Working with payroll verification specialists and leveraging their configurable automated system, speed and accuracy will be on your side to enable rapid action and response to the identified root causes of any variance.
There are bigger brand payroll audit companies that you could approach. With Red Wagon Workplace Solutions, there are no audit conflicts. No accounting services conflicts. You should trust your assessment to the team that provides straight-talking, practical advice that will make a difference to you, your employees, and the organisation.