Most organisations are doing their best, but even with good intentions, payroll mistakes can quietly creep in.
Teams work hard to get things right, yet the complexity of pay rules and entitlements means errors can still occur. Whether that be a classification that is not updated properly or a miscalculated shift loading, these small errors can quietly snowball.
As a result, many organisations are adopting a remediation mindset, recognising when it is time to step back, review, and address issues before they escalate.
Remediation is a positive (and necessary) step toward fixing the roots of deeper issues. In this blog we unpack why it matters, what can go wrong, and how to get it right.
Why some organisations hesitate and why that is risky
Imagine this scenario:
An employee gets promoted, but their new classification is not updated in the system. Six months later, it is picked up and now they are owed backpay for being misclassified. It is only a few hundred dollars. No big deal, right?
Until organisations realise the same oversight has happened across dozens, or hundreds of employees. Suddenly, that “small fix” has ballooned into a remediation project.
There is no denying that launching a remediation program sounds daunting. There is the perceived cost, the legal complexity, the uncomfortable conversations. Some organisations convince themselves it is better to wait, hoping the issue stays small or unnoticed.
But here is the real risk: The longer underpayments go unaddressed, the bigger (and more expensive) the problem becomes.
Penalties, backpay orders, and interest charges that snowball fast. Class actions are not just scary headlines either — they are a growing reality in Australia.
Add the very real costs of brand damage, employee distrust, lost productivity, and leadership distraction, and suddenly, the "cost" of avoiding remediation dwarfs the cost of doing it properly.
If your underpayments are significant, the Fair Work Ombudsman (FWO) expects organisations to self-report under the Payroll Remediation Program. Find their latest Payroll Remediation Program Guide.
What makes remediation so tricky?
It is about navigating the grey areas like how to handle employees who have since left, how to treat retrospective tax obligations, and how to fix impacted superannuation and leave balances.
It also involves unpicking years of pay data across shifting awards, Enterprise Agreements, contracts, and legislative changes. It is painstaking work, and it cannot be rushed.
One of the biggest pitfalls? Underestimating the scope and delaying action. It is almost never just the one employee you first notice. Hidden patterns usually mean more roles, more time periods, and more money at stake than early estimates suggest.
Another mistake? Treating remediation like a one-time apology tour without fixing the root causes or seeking advice to prevent future mistakes from happening.
A better way to approach remediation
Organisations should not panic, but they should treat remediation as an opportunity to strengthen workflows and governance.
Here is what that looks like:
- Scope the problem early: Understand how far back the issue might go, who might be impacted, and where the error sits.
- Get the right help: Payroll experts, employment lawyers, and advisors can help you design a proper remediation framework.
- Notify FWO when needed: If your situation meets the FWO thresholds, engaging early and transparently may support better outcomes.
- Prioritise employee communication: Clear, timely updates build trust and credibility through the process.
- Leverage technology: Remediation once meant sifting through years of pay data manually—often with entire teams buried in spreadsheets. Today, advanced tools can identify errors and calculate backpay in a fraction of the time, turning a years-long process into a matter of months.
And crucially, fix the root causes. Audit your systems, strengthen controls, and update processes so the same mistakes do not happen again.
Final thought
Payroll errors might not start with bad intent, but left unchecked, they can have serious consequences for employees and organisations alike.
Tackling remediation head-on and treating it as an opportunity to strengthen systems and processes is the difference between a painful exercise and a powerful reset.
At the end of the day, getting pay right is not a bonus, it is the bare minimum. Owning mistakes and fixing them properly is what separates responsible organisations from reckless ones.
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