From shaping workplace culture to nurturing employees, Human Resources has become a central force in how organisations operate.
At its core, every organisation carries two fundamental responsibilities: creating a safe working environment and making sure employees are paid correctly.
Human Resources has long excelled at building safe, inclusive, and engaging workplaces. But when it comes to pay, there is growing recognition that Human Resources also plays a vital role in driving payroll compliance.
This blog explores how Human Resources can step into and support that role.
Why underpayments happen?
It is easy to assume that wage underpayments are caused by technical or system errors. But more often, they are symptoms of a broader issue: disconnected processes and siloed teams.
Here is how it can play out:
- A job is advertised without a clear award classification.
- Rosters are built to meet operational demand, not in alignment with award conditions.
- The workforce management system sends data downstream without flagging compliance risks.
- Payroll receives the information late in the process and is expected to execute accurate payments with minimal context.
No one in this process is acting maliciously or carelessly. The root issue is fragmentation. Critical steps occur in isolation, without shared visibility or accountability.
Payroll compliance is not something software alone can fix. It requires collaboration across operations, legal, payroll, and beyond.
Where does Human Resources fit in payroll compliance?
Right at the centre.
Human Resources typically leads early-stage decisions such as job design, award interpretation, and onboarding workflows. If these steps are not clearly linked to payroll rules and entitlements, errors can be introduced early and go unnoticed.
But Human Resources also holds a unique ability to lead the shift from reactive compliance to proactive risk management. This includes:
- Bridging the gap between workforce planning, legal, finance, operations, and payroll
- Facilitating conversations around employment terms, rostering, and compliance obligations
- Mapping the employee journey to pinpoint where compliance risks emerge
The move from reactive to proactive starts with Human Resources
In traditional payroll models, underpayments are discovered after the fact, often triggering remediation projects and negative headlines.
A modern approach focuses on prevention. It involves regular audits, identifying root causes, and fostering shared accountability across teams.
But this shift does not come from IT or finance system support alone. Payroll compliance is a whole-of-organisation issue.
Human Resources is well placed to play a facilitative role, aligning people, processes, and policies to embed compliance into everyday operations. It is a natural extension of Human Resources broader remit to support fairness, governance, and workplace culture.
Seven ways Human Resources can strengthen payroll compliance
- Set the ground rules and map how they are applied
Human Resources plays a key role in defining how people should be paid from classifications, award alignment, overtime rules, and more. But good policy needs good execution. Map the full employee journey from recruitment to offboarding, clarify who is responsible at each stage, and identify where things might break down.
- Lead the transformation
Bring together stakeholders from payroll, legal, operations, finance, and workforce planning. When teams see how their work connects to payroll compliance, it becomes easier to learn, improve, and collaborate. Starting the conversation is a step towards a more proactive culture.
- Start small and build momentum
People and processes do not need to be improved all at once. Focus on one area, test improvements, learn and expand from there. Small wins, like fixing classification processes or improving onboarding add up overtime.
- Check the systems
Work with payroll teams to make sure systems are accurate and up to date. Regular audits of classifications, pay rates, and timekeeping data can help identify issues early and prevent errors before they occur.
- Share the knowledge
Train managers and supervisors on their compliance responsibilities including rostering, recordkeeping, and overtime approvals. Empower employees to understand their entitlements and know how to raise concerns.
- Monitor and respond
Establish robust mechanisms for ongoing payroll compliance monitoring. Set up confidential channels for employees to report concerns and conduct regular audits to detect problems early. If something goes wrong, respond quickly and transparently.
- Frame payroll compliance as a strategic issue
Payroll compliance is not just a back-office function. It is a strategic risk area with financial, legal, and reputational consequences. Human Resources can elevate this conversation to the boardroom and advocate for embedding compliance into broader governance and enterprise risk frameworks.
Human Resources can lead the way
Payroll compliance is not a standalone issue, and it does not belong to one team. It requires coordination, shared accountability, and cultural change.
Human Resources professionals are uniquely positioned to lead that shift. By starting the conversation, connecting the dots, and championing proactive strategies, Human Resources can help move organisations beyond remediation and towards lasting prevention.
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