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In the previous article, we discussed the third stage of a payroll remediation project: Issue Rectification. We explained key steps including identification of the root cause, system and process changes, training for payroll staff and ongoing audits.
In this article, we will cover the fourth stage of a payroll remediation project: remediation for employees.
Remediation for employees is not only a legal obligation, but also a moral and ethical one. Underpaying employees can have serious consequences for their financial well-being, trust, and engagement. Employers who fail to remediate for employees may face penalties from the Fair Work Ombudsman, legal action from employees or unions, reputational damage, and loss of talent.
The process of remediating for employees may vary depending on the nature and extent of the underpayments, but generally involves the following steps:
Companies should inform employees about the payroll recalculation outcomes as soon as possible, explain how underpayments will be paid back, and how future errors will be prevented. Employers should also show contrition by apologising and thanking employees for their patience and cooperation. Communication should be clear, honest, and empathetic, and allow
If former employees need to remediated, they should be contacted to obtain current bank account details. Employers should then pay back the underpaid amounts current and former employees as soon as possible.
Companies should support their communication with information and documents. This may include payslips or statements, amended payment summaries, letters or notices. Companies should also advise employees to seek financial or tax advice if needed.
Companies should also address any issues or concerns from employees. This involves setting up a dedicate email and phone hotline to respond to questions from employee. This hotline could be used to clarify misunderstandings or errors, resolve disputes or grievances or providing additional information.
Companies need to comply with any orders or directions from regulators with respect to remediation. We will discuss dealing with regulators in more detail in the next and final article in the series.
Grant Thornton has extensive experience and expertise in assisting employers with payroll remediation projects. We can help you with:
If you need help with remediating for employees, please contact us today. We can help you restore trust and confidence with your employees, and ensure you are paying them correctly and fairly.
