Employee payments review

Since announcing the review, the University has:  

• Examined and analysed the payroll data and timesheets of all staff covered by the Enterprise Agreement, including casual academic staff, reviewing over 2.05 million payslips generated by the University between January 2014 and November 2020. A detailed explanation of the initial review and findings  is available on this page. 
• Implemented a series of controls, tools and training for professional staff (particularly casual professional staff) to ensure correct payment in accordance with the Enterprise Agreement, including new timesheet processes that automatically apply the provisions of the Enterprise Agreement for payment of entitlements such as overtime, minimum engagement, and on call, shift and meal allowances. 
• Made remediation payments to staff affected by payment errors. Of the individuals affected, more than half were owed less than $500, 70% were owed less than $1000, and 6% were owed more than $5000.
  
• Developed draft work classification and payment guidelines for casual academic staff (or ‘paycode guidelines’ for short) to facilitate consistency and provide clarity on how, in accordance with the Enterprise Agreement, the University engages and pays casual academic staff across its faculties and schools. Staff feedback on the paycode guidelines is now being reviewed and incorporated as appropriate, after which time the paycode guidelines will be implemented across the University.  
• Introduced process improvements for the engagement, work allocation and payment of casual academic staff, which are being piloted in the Faculty of Arts and Social Sciences and the Faculty of Science. These process improvements are being supported by the creation of new administrative support roles in the faculties.  

The University has been keeping the Fair Work Ombudsman informed about the review since the initial self-disclosure in 2020. 

Overview 

In August 2020, the University announced a review of payments made since January 2014 to employees covered by our Enterprise Agreements (2013-17 and 2018-21), including casual academic and casual professional staff. The review started with a comprehensive examination of payroll data and timesheets for all staff covered by the Enterprise Agreement (EA). This involved PricewaterhouseCoopers (PwC) analysing more than 2.05 million payslips generated by the University between January 2014 and November 2020.  

Findings

The initial phase of the review primarily identified issues related to the payment of some entitlements to professional staff, particularly casual professional staff, with a small number of errors affecting academic and non-casual professional staff members. Approximately one third of all staff included in the scope of the review were affected. 

The payment errors identified by the review arose largely from a combination of the incorrect gathering and reporting of information into the University's payroll systems, and limitations in the University's payroll technology capacity to correctly interpret all timesheet data in all circumstances. The majority of the identified underpayments affected casual professional staff and arose from the incorrect application of either: 

• the ‘minimum engagement’ provisions of the enterprise agreements, which generally provide for casual professional employees to be paid for a minimum of three hours of work even where the timesheet submitted by the employee records that less than three hours of work has been performed.
  
  
• the overtime entitlement for professional employees for time worked outside the ordinary span of hours or on weekends. 

For non-casual professional staff members, the errors mainly related to the incorrect payment of unclaimed overtime and meal allowance entitlements. A very small number of errors were identified affecting academic staff, predominantly non-casuals, and largely related to the calculation of public holiday and leave entitlements. 

Where records were incomplete, assumptions favourable to the employee were made to identify all possible underpayments. 

The review did identify some instances of overpayments, however, the University determined not to seek recovery of these from any employee. Where an employee was both underpaid and overpaid for the same work because the wrong entitlement was claimed and paid, remediation payments were calculated as the net difference. 

Payments made  

Remediation payments to current and former staff, identified as being affected in the initial phase of the review, were made in 2021. This was mostly to address payment errors related to the period January 2014 to November 2020, and primarily related to the incorrect calculation of overtime and minimum engagement entitlements. All identified entitlements owing were paid, including superannuation, as well as interest calculated from the date the error occurred.

Remediation payments have been made to the majority of current staff who were identified as being affected in the second phase of the remediation payment review, which addressed payment errors related to the period November 2020 to June 2022. The majority of these errors were connected to the incorrect calculation of overtime and minimum engagement entitlements, and related largely to professional staff. The remediation payments included identified entitlements as well as superannuation and interest calculated from the date the error occurred. The University is continuing to seek contact with impacted former employees to facilitate their payments.

In total, 14,568 current and former staff members were identified as being affected by these payment errors, out of 36,270 staff covered by this phase of the review. Of the individuals affected: more than half were owed less than $500, 70% were owed less than $1,000, and 6% were owed more than $5000. The total value of wage underpayments was $21.4m, representing 0.2% of all payments made to staff during this period.

Upcoming payments 

The University is progressing a review of payments made to staff at Sydney Conservatorium of Music who have worked overtime and accrued or taken time off in lieu (TOIL) since 1 January 2014. The review involves checking whether staff were correctly paid or accrued and/or took TOIL for overtime that was required to be worked in accordance with the Enterprise Agreement, as part of the University’s overall commitment to ensuring staff are correctly paid. 

The University began direct engagement with all current and former staff in scope of the review in June 2023 to invite them to provide input into the remediation process and ensure that it is thorough and complete.  

If you are a former staff member and have received correspondence from the University about this matter requesting you confirm your details, please complete the secure online form. 
 

Taxation of back-pay 

Payments of back pay staff receive, including those that relate to earlier financial years, is included on the PAYG payment summary for the year in which the back pay is paid.   

As with any salary, tax is withheld from payments of back pay in accordance with PAYG withholding rules at a rate prescribed by the ATO.  

The University is providing staff members who are being paid remediation payments with details relevant to the payment that are needed to complete their tax return. As applicable, this includes:  

• a breakdown of the underpayment amount by financial year.  
• details of ‘Lump Sum E’ payments. A Lump Sum E is an amount of back pay that accrued, or was payable, more than 12 months before the date of payment and is $1,200 or more. Lump Sum E payments need to be reported in your tax return as a lump sum payment. The ATO website has more information about  reporting lump sum payments in your tax return.