Get Payroll Right: More Payroll Audits are Coming

Posted by Alloc8, Tue, Mar 30, 2021

Get Payroll Right

Getting payroll right has never been more important. With Fair Work Australia auditing many industries, the message is clear—get your payroll in order or get ready for trouble.

The most recent target of inquiry by the Fair Work Ombudsman has been the horticulture industry—with calls for a royal commission this year. Retail and fast food giants—Coles, Woolworths, KFC, McDonalds, and Hungry Jack’s—all faced national wage scandals for underpaying tens of thousands of employees.

Well-known companies like Merivale and Qantas have also come under Fair Work’s fire. There’s clearly a nation-wide momentum building for payroll audits—and it pays to be ready. 

Fair Work’s Next Focus?—Labour Hire, Construction and Traffic Management

George Khreish, CEO at Alloc8, says this kind of scrutiny could be the new normal. “With the increased scrutiny of payroll in the media, and calls for pay audits in the Aged Care and Horticulture sectors, it would not be surprising to see an industry-wide audit coming for building and construction".

A perfect storm may be brewing, with three factors signalling the likelihood of major audits across remote workforce industries.

First there’s the growing pattern of recent investigations—there are signs that the recent Fair Work investigations to hit the headlines are not slowing down—and in fact could be the new normal.

Second there’s the constant pressure from unions like CFMEU—not only to drive pay and allowance increases, but to drive compliance in any way possible, including Fair Work inquiries. 

Finally and perhaps most ominously, the Building and Construction Award is included in the latest 1.75% increase to award rates, set for review after February 2021. Crackdowns are likely to occur to check on that increase—which means an opportunity for Fair Work to check on everything else.

Add these three elements and it’s clear that remote workforce companies could face widespread payroll audits in the coming months.

The Serious Risk of Inquiries

Payroll audits can pose serious risk—and even existential threat—to remote workforce companies of any size.

Unintentional mistakes in complex award interpretation, payment inaccuracies, or missing paper trails exposed by inquiries can cause a snowball effect of wasted time and money. One dispute can inspire multiple further disputes and liabilities.

Massive on-the-spot fines of up to $500k are certainly tough—but they’re also just the beginning. Audits can lead to court orders—forcing companies to answer cases and pay legal fees—putting a huge strain on the attention of owners and other staff.

Brand and reputation can also take a serious hit from audit investigations—they’re a PR disaster. When the media attacked high profile restaurateur George Calombaris over payroll problems in 2019, it impacted his reputation as much as his financial position.

The knock-on effects of public prosecution can be far-reaching—companies may struggle to attract talent, partnerships and contracts as they once did. 

Get Audit-Ready with Alloc8

When audits do come, being unprepared costs time, money, and untold stress. Cobbling together spreadsheet reports or manual data, relying on memory for context, interpreting the systems of staff who may have moved on—none of it’s worth the risk.

That’s why Alloc8 makes payroll audit-trailing simple. Alloc8 automatically saves all timesheets in one place, with a history of any edits recorded on the timesheet—complete with signatures, timestamps, and location stamps for every job.

With all the information in one place, you can download paperwork for all jobs, including any paper trails you need, in a matter of minutes—so you’re not stuck sifting through information from different platforms for weeks on end.

Patching together payroll data from different systems and spreadsheets risks the kind of inaccuracy can look very bad under inquiry. So Alloc8’s all-in-one-place approach prevents thousands of risky, manual moments with sensitive data. 

In fact, Alloc8’s timesheet validation picks up mis-keys before they’re submitted by workers—and offers reports that highlight anomalies before they become problems.

Alloc8 eliminates grey areas and prevents manual payroll mistakes with complex award interpretation and integrated enterprise bargaining agreements—updated by Alloc8 whenever awards change—so you don’t have to worry about underpaying or overpaying your workers.

Payroll Audit Trailing Made Simple

At the heart of the every Fair Work scandal lies a payroll problem—so it’s worth knowing that your workers are paid properly, and your paper trails are accessible, accurate, and up to date. 

Alloc8 automates your compliance—so you can be confident that when an audit does come, you’re ready.

Find out how Alloc8 can help improve compliance in your business

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