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Underpaying Your Employees Can Damage Your Business

Published May 7, 2023 (last updated on March 4, 2024) | Adam Wyatt - Content Writer

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The employment and industrial relations framework in Australia is highly complex, with over 120 different Modern Awards that span different industries. Each of these Awards contains specific terms, making it easy to miss a detail that results in significant underpayment or overpayment. Often, underpayments are unintentional and can be a result of an administrative oversight.

“Even a difference of one cent per hour across a large number of employees over a long period of time can become a substantial underpayment. If a [1]banking giant can struggle to get it right, it is outrageous that small businesses are expected to work within the same system and be without fault,” said Ryan Price, Content Manager from Employsure.

“There are many consequences when businesses fail to pay their employees correctly, including reputational damage, loss of trust, and regulatory action, such as fines and penalties. Additionally, the Fair Work Ombudsman has a watchful eye for underpayments, with investigations and regulatory action becoming more common in recent years.”

Employsure offers several measures that can help businesses protect themselves from underpayment claims, such as having clear position and role descriptions, correctly classifying employees, regularly reviewing rates of pay against relevant awards, and seeking professional advice.

Employsure can assist you in paying your employees correctly by reviewing your business and helping you to confirm your award coverage to ensure you are applying the correct classifications and entitlements. We provide advice when you need it most, and our team of experts can help you navigate the complex system,” continued Ryan.

“We are committed to helping SMEs build better businesses; and we do so by empowering employers and business owners with the knowledge they need to not only manage their employees; but ensure they are correctly paying their employees their due wages,” concluded Ryan.


[1] CBA admits underpaying staff by over $16 million: report | HRD Australia (hcamag.com)

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