Proactive steps required to meet payroll changes

Legislative changes will continue to reshape employers’ payroll obligations this year. Since December 2023, the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 has been introduced over several tranches, with the most recent tranche criminalising intentional wage theft from January 1. A proposed superannuation ‘payday’ obligation, although not yet enacted into law, is also slated for introduction from 1 July 2026.

Often, employers do not deliberately set out to underpay their staff. Many businesses are grappling with compliance due to the complexity of interpreting changes to awards, enterprise agreements, and other workplace entitlements. Common challenges include the misclassification of employees, failure to account for overtime, penalties, or allowances, and errors in calculating superannuation contributions. Outdated payroll systems, insufficient internal controls, and a lack of awareness of legislative changes compound these issues further. Underpayments can lead to significant financial and reputational risks including penalties, back payments, and loss of employee trust. Addressing these issues demands a review of payroll practices, improved record-keeping, and ongoing investment in compliance measures to prevent future errors.

To ensure compliance with evolving payroll obligations, businesses must take proactive steps. This includes conducting regular payroll reviews to identify and rectify potential discrepancies, implementing systems to accurately track and process payment of employee entitlements, and updating payroll software systems.

Employers should provide comprehensive training to payroll staff on the latest legislation and maintain clear, up-to-date documentation of payroll records. Seeking advice from payroll advisors or legal experts can also help businesses to navigate complexity, mitigate risks, ensure compliance, and foster trust within their workforce and communities.