Stages of a payroll remediation project – Stage 5 Dealing with Regulators

Previously, we’ve explored the initial four stages crucial for companies and their legal advisors:

1. Risk Review
2. Recalculation
3. Issue Rectification
4. Remediation for Employees

Now, we turn our attention to the last stage: Dealing with regulators

After ensuring that employees have been fairly compensated, it’s time to address the regulatory aspect of payroll remediation. This stage is critical as it involves interactions with regulatory bodies that oversee payroll compliance.

Why is dealing with regulators critical?

Engaging with regulators is a vital step in demonstrating a company’s commitment to rectifying payroll issues and adhering to employment laws. It’s an opportunity to rebuild trust and show transparency in operations. Failure to properly engage with regulators can result in fines and further damage to reputation.

How to engage with regulators effectively?

The process of dealing with regulators typically includes:

• Self-reporting: Proactively informing regulators of the payroll issue and the steps taken to rectify it is essential. This demonstrates good faith and can potentially mitigate penalties.
• Providing documentation: Regulators may require detailed records of the payroll recalculation, the remediation process, and proof of payments made to employees.
• Following directives:  Companies will need to comply with instructions or corrective actions mandated by regulators. These may include additional reporting requirements or an Enforceable Undertaking (EU) with the Fair Work Ombudsman (FWO). 
• Maintaining open communication: Establishing a consistent dialogue with regulators ensures that any concerns are promptly addressed and that the company remains compliant with ongoing directives.

Navigating dialogue with regulators

Grant Thornton is equipped with the expertise to guide companies through this complex stage. We can help your business with:

• Preparing for audits: Our team can assist in organising your records and preparing for any audits that may be conducted by regulators.
• Compliance strategies: We offer advice on long-term strategies to maintain payroll compliance and prevent future issues.
• Preparation of Expert Reports: When performing historical recalculations, the additional of a comprehensive or Expert Report can significantly enhance a regulators understanding of and confidence in the recalculation and remediation process. 
• Enforceable Undertakings (EU): An EU is a legally binding agreement between a company and the FWO. It outlines specific actions the company commits to taking to rectify non-compliance. An Independent Auditor or Assessor may be appointed as part of an EU to ensure that:
  • Independent Assessor: Remediation calculations prepared by the company for a historical period are accurate; or
  • Independent Auditor: the company has resolved the issues leading to an EU, through one or more auditors at the future point in time. 

Grant Thornton can take on the role of Independent Assessor or Independent Auditor where independence is cleared. 

For assistance in dealing with regulators and ensuring your payroll practices are fully compliant, reach out to Grant Thornton. We’re here to support you in concluding your payroll remediation project with confidence and integrity.

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