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.”
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.
