ADP’s People at Work 2021: A Global Workforce View surveyed 1,902 workers in Australia, and reveals one in two (52 per cent) workers believe they have been underpaid at least once during the pandemic. Similar numbers (51 per cent) believe that they had been paid late, up from 48 per cent prior to the onset of COVID-19.
The ADP research also indicates two in five workers were overpaid (38 per cent) or experienced issues with their pay (43 per cent), such as failed payments or incorrect tax.
Problems with payroll extended to how quickly employers are resolving issues of incorrect payment. Almost half (43 per cent) of workers said their employer did not resolve their underpayment issue by the next pay cycle. Alarmingly, one in 10 (12 per cent) said their underpayment was never resolved.
The rise in incorrect payslips has coincided with a time when Australian workers have already been feeling anxious about their economic security. More than a third of survey participants (38 per cent) say COVID-19 will have a negative impact on their financial security in the next three years.
Kylie Baullo, Asia Pacific vice president – client services at ADP, said the prevalence of pay errors is alarming, and holds deep ramifications for both employee wellbeing and the business bottom line.
“From loss of employee confidence and causing stress, to not being able to pay bills, incorrect and late payments can have a real, negative flow-on effect for individuals. For businesses, the headlines have shown there are significant financial and reputational implications for being charged with underpaying employees,” she said.
“COVID-19 introduced the need for greater flexibility in how work is done and in the same period we saw an influx of legislative changes impacting wages, including adjustments to payroll tax, pay entitlements and support schemes like JobKeeker. Not all businesses were ready to smoothly navigate the many changes to compliance and compensation.”
Against a backdrop of increasing unreliability around pay, a third of workers in Australia say they are reviewing their pay more closely now than they did before COVID-19. “An incorrect payslip on payday can have far-reaching personal implications and can feel like a real breach of trust for employees, and something they don’t forget in a hurry,” said Ms Baullo.
“Businesses need to be mindful that employees are paying a watchful eye on their payslips. If business operators, all the way from local SMEs to multi-country conglomerates, don’t prioritise running efficient, accurate and reliable payroll divisions, they risk losing talent.
“When employees experience errors in their pay, payroll staff shift their focus to answering queries and checking historical data, distracting them from processing payments or spending time on more strategic work. Often, the first step to improving payroll accuracy is automating the input of data using integrated digital technologies.”
While Australia is not alone in the worsening levels of pay accuracy, Asia Pacific (APAC) is the worst-performing region worldwide for delayed payments. In APAC, 76 per cent of workers said they have been paid late, compared with a global average of 69 per cent.