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Aussie workers underpaid $1.3bn every year

By Grace Ormsby · November 21 2019
Reading:
egg

Earn

Aussie workers underpaid $1.3bn every year

By Grace Ormsby
November 21 2019
Reading:
egg
Underpayment of staff

Aussie workers underpaid $1.3bn every year

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By Grace Ormsby · November 21 2019
Reading:
egg
Underpayment of staff

Australian employers are underpaying their workers approximately $1.35 billion each year, new modelling has revealed.

A report from PwC has indicated that one of the key risks facing businesses today is in ensuring employees are paid accurately for the work that they do.

It also estimated that around 13 per cent of Australia’s total working population is affected by such underpayments.

“People should be fully and fairly rewarded for their contribution to their employers’ success,” the authors wrote.

They stated that “the vast majority of employers set out to do the right thing by their people, but the chances of inadvertently making a mistake are extremely high and, as we are witnessing, small mistakes made across large workforces over several years add up to very large numbers.”

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In reality, according to the consultancy firm, it’s a combination of a number of factors that have contributed to the challenge so many employers are now facing.

It led to PwC undertaking modelling using data from the Fair Work Ombudsman, with a focus on industries with a high prevalence of underpayment of workers’ entitlements.

The subsequent analysis indicated there is in the order of approximately $1.35 billion in underpayments each and every year.

According to the report, sectors most at risk include construction at around $320 million and healthcare and social assistance underpayments to the approximate figure of $220 million.

This estimate is set to have an impact on one-fifth, or  about 21 per cent, of the workforce in the above industries, and equates to an estimated 13 per cent of the total Australian workforce.

PwC indicated that for workers, the introduction of a simpler system would be more transparent and reduce inadvertent underpayments.

For employers, it said a simpler system would make it easier for them to do the right thing by their workers while reducing their own risk exposure and compliance work.

And for the wider economy, it was reported that a simpler system would cut red tape, boost productivity and ensure Australians receive a fair day’s pay for a fair day’s work.

The modelling comes just after the release of the salaries being provided to Australia’s 10 highest-paid CEOs.

Aussie workers underpaid $1.3bn every year
Underpayment of staff
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About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

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