For many on linkedin now, you may be aware or have even reposted yourselves the latest underpayment headline of “BHPs 450mil underpayments…..”
In turn, many are advertising their specialist services and/or related Payroll and Workforce Compliance Software as a way of fixing this issue.
However, as Australia’s first and only membership-based association for Employment Tech and Payroll Practitioners which officially launches in August 2023, our industry knowledge and role as the voice for these two groups looks at both industry wide solutions (which we advocate for) as well as identifying and proposing solutions to Government relating to questionable industry practices.
I wish to extend to all of you the following information and in turn, challenges for you to consider in both the context of what you do as Payroll Practitioners and payroll Tech/Workforce Compliance experts. This does not in anyway relate to the BHP case, however, it does relate to many similarly sized cases which were extensively researched by Ciaran Strachan (MD & CEO AWCC Ltd) which in part led to the creation of AWCC Ltd and its Divisions including the first to be launched also in August, Employment Technology Providers Australia (ETPA).
Here is an example of just ONE of many widespread issues I came across during my three years of research.
Just who the hell is in charge of Payroll?
In almost all cases of widespread non-compliance researched, including underpayments, overpayments, wage-fraud and maladministration, the “decision maker” was an internal head of (take your pick) with no payroll background who disagrees with your payroll compliant solution.
During my research, the four main camps that kept coming up and keep coming up to this date are:
- The head of HR (CHRO),
- Head of Finance/Accounting (CFO),
- The combination of the two (COO, who is usually an accountant) and
- More recently, head of IT or system they are administering for payroll……
All which claim to represent payroll and have a “I know boats” approach to payroll, yet have no background in payroll, skills or education in payroll, or it’s systems including the difference between configurable (ERP vs non ERP) and non configurable, and the few that may know what they are doing in this space are ultimately subjected to the whims of their poor decision making.
Only last month, I had a frankly waste of time conversation with a head of HR for a large enterprise experiencing underpayment issues, however, due to what I can only describe as egotistical in nature, that head of HR did not recognise a recommended remediation expert for their Payroll Governance issue, but rather, was too fixated on that experts familiarity with SAP and therefore decided they were not a payroll expert but rather a systems specialist. Despite pointing out that we had recently identified in our Payroll Professions ANZSCO submission that this is actually one of two Tech focussed specialisations of Payroll, she had made her mind up based on no factual or experiential knowledge. This kind of C-Suite power in a Corporate Governance sense both irresponsible and dangerous, soon, it may also become a contributing factor toward a criminal conviction for corporate hierarchies involved in both unintentional underpayments AND wage-theft, and not just wage-theft.
Therefore, I challenge the industry to think more broadly and put yourself in the position of a payroll contractor or employee (including systems expert) facing these two scenarios, and I’ve thrown in a couple of questions for you as industry experts to ponder going forward as AWCC Ltd will be tackling them in the future:
- You are an expert and have answers regarding both systems and solutions for payroll and Workforce Compliance, are engaged to remediate/review payroll and identify potential underpayments/workforce non-compliance. However, upon discussing solutions with the head of X (not payroll in any case), the responses to most of your remediation recommendations are a clear “no”. In some cases, the reasons are given but most of the time, there is no justification (perhaps a deliberate wage-theft strategy is in play, but who knows right) so how would you deal with this?
- You are told by your boss (contractor supervisor or client) to knowingly implement a non-compliant solution. This scenario has come to my attention several times and certain suppliers of “Fair Work compliant” software solutions keep coming up. My question here is do you think that as an industry (employment technology) and for payroll practitioners, there should be a code of practice or even, regulation? And what should the consequences be for knowingly configuring or supplying a non-compliant payroll system and/or services?
As an industry that specialises in this space, this is a conversation we need to have, especially as more information pertaining to the operational causes of underpayments and wage-theft come to light.
And don’t forget, AWCCs second submission to the recent DEWR Industrial Relations (including Wage-Theft Act) consultation papers will go live on linkedin next Monday, in which our recomended definitions for wage-theft are alluded to above (Wage-fraud, underpayments, overpayments and maladministration).
Regards
Ciaran Strachan
MD & CEO AWCC Ltd.