Government entities run a higher risk of committing wage theft

As the new wage laws come into effect, private sector businesses have been scrambling to ensure that they have the processes in place that keep them from committing any contraventions – but are government entities doing the same?

If organisations fail to have an accurate system in place when it comes to their payroll, wage compliance can become a nightmare. Yet, for organisations that are government entities, wage compliance can be that much trickier as multiple awards and agreements can prove to be difficult and complex, opening the organisation up to wage breaches.

Damien Durston, ANZ head of workforce management at OneAdvanced, explained the complexities and difficulties that government entities can have when it comes to wage compliance.

“Wage theft, the underpayment of employees for their work, is a pressing issue that affects organisations across Australia, including government entities. While often associated with private-sector businesses, wage theft also has implications for the public sector.

“The Australian labour market operates under complex regulations, including awards, agreements, and labour laws. Like their private sector counterparts, public sector entities must adhere to these rules to ensure fair pay for their employees.

“However, these regulations often vary significantly depending on the industry, location, and even the specific roles employees undertake within government,” Durston said.

Durston listed a number of different examples of why government entities, especially, can be more prone to committing wage underpayments.

“Multiple awards and agreements: Government employees often work under several different awards, each with its own rules regarding pay, penalties, and allowances. Navigating this complexity manually or with outdated systems significantly increases the risk of underpayment.

“Variations in state legislation: Wage entitlements, particularly in areas like holiday pay and long-service leave, can vary from state to state, adding an extra layer of complexity for federal or interstate government organisations.

“Frequent employee movement: Government employees are often subject to rotational shifts or move between departments, each governed by different agreements. Manual processes for tracking such movements frequently lead to errors in compensation,” Durston said.

Although government entities are in some ways more prone to committing wage underpayment due to the differing complexities, committing these breaches is still inexcusable. Durston believes that one place to start is leveraging advancing technology to clean up payroll processes.

“Technology must become a central part of government entities’ strategies to address these challenges and ensure wage compliance,” he said.

“The first step to eliminating wage theft within government organisations is recognising that traditional, manual payroll processes must be revised to handle the complexity of modern labour regulations. A people management platform will enhance payroll accuracy, automate compliance processes, and foster transparency in employee compensation.”