Why is it so hard to pay people correctly in 2020?

4 min read ·  

Most people never have to worry about the payroll compliance process required to get someone paid. It’s not a hugely riveting subject; staff go to work, they work, they get paid.

However, as Fair Work’s list of big names failing to pay minimum entitlements continues to grow, we’re often left wondering why it is so hard to pay employees correctly. 

What most don’t realise is that behind every pay run is a series of legal interpretations with varying degrees of complexity and ambiguity. Australia is routinely identified as one of the most complex countries to run payroll in, with workforce administration, payroll compliance requirements, and regulations identified as the major complicating factors.

With each new wage rate transgression, I’m reminded of an old industry saying, “a good payroll officer is somebody nobody knows.” An understanding that attention is only paid to your payroll when there are errors, under-payments, or the pay is late.

Far from magic, the time and expertise required to calculate pay could convince any seasoned mathematician to hang up their wand. In total, Australia has 122 Modern Awards with the average Award having between 180-200 individual rules. These rules specify pay rates for overtime hours during the week and weekend, overtime for RDO, public holidays, late-night shifts and employee classification, just to name a few. With so many complex rules, it’s easy to see why some of the best and most experienced in the business have found themselves out of the good graces of the Fair Work Commission. 

It’s become increasingly clear over the last 12 months that meeting Fair Work’s requirements is becoming less and less feasible for your average Australian. If big business, backed by payroll teams with decades of experience can be caught out, what chance does your average Australian small business stand?

For the past seven years, Tanda has made it their business to know the intricacies of payroll, building software that automates the increasingly complex entitlements put in place by the Fair Work Commission. Our award engine reduces the administrative burden of paying your staff correctly by managing the various rates and entitlements for you.

Being smarter and more innovative is the only way to control labour spend in the productive, high-wage workplaces of the future. It’s time to use wage compliance management as a competitive edge.

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