The cost of getting pay wrong in Australia

What the Fair Work Ombudsman's enforcement record says about payroll systems that were never fully tested.

Every hour an Australian employee works is governed by an award or enterprise agreement: penalty rates, overtime, leave loading, superannuation. Those rules don't hold still. They shift with every new enterprise agreement, every annual wage review, every system change. Those rules must be reflected in the workforce management (WFM) system. Get the WFM configuration wrong, and the bill doesn't stop at back-pay.

What the data says

The Fair Work Ombudsman's own numbers make the scale of the problem hard to ignore.

• $450M recovered for more than 181,000 workers in 2025-2026

• $358M recovered for more than 249,000 workers in 2024–2025 

• $2B+ recovered for underpaid workers over the past five years

And the stakes just rose. Since January 2025, intentional underpayment is a criminal offence in Australia, carrying fines of up to $8.25 million. Honest mistakes aren't criminal — but back-pay, interest, superannuation shortfalls and penalties still apply regardless of intent.

Three organisations, three preventable failures

None of the employers below set out to underpay anyone. In each case, the Ombudsman traced the breach back to how pay rules were configured and tested — and the problem surfaced only years later.

Healthcare Organization

• What it cost: $4.4M

  • 2,700+ staff underpaid leave loading, allowances and casual overtime, 2014–2020

• • $4.02M in wages, plus $267K in superannuation and $136K in interest
    
    
  • Independent audit, a dedicated hotline, a public notice, and a three-year remediation program

University System

• What it cost: $32.7M

  • 16,382 staff underpaid across three successive enterprise agreements, 2017–2026

  • $9.2M in wages, plus $1.02M in superannuation and $742K in interest

  • A $175K contrition payment, traced to payroll configuration errors

University System

• What it cost: $11M

  • 33,069 staff affected; individual back-pays as high as $398,000

  • $23M in wages, plus $4.9M in interest and $4.1M in superannuation

  • A $500K contrition payment, attributed to governance and payroll failures

Beyond the back-pay

The wages owed are only the starting line. Every enforceable undertaking on the Ombudsman's public register carries secondary costs:

• Interest & super: More than 9% added on top of wages owed.
• Contrition payments: Between $175,000 and $500,000 paid directly to the Commonwealth.
• Audits & oversight: Independent audits, public hotlines, published notices, and ongoing board reporting.
• Time & trust: Multi-year remediation programs, with every enforceable undertaking published and named.

“Poor governance led to long-term breaches and significant staff underpayments and rectification costs.”

— Anna Booth, Fair Work Ombudsman, on the St Vincent's Health Australia enforceable undertaking

Getting ahead of it

In every case above, the root cause wasn't a rule anyone chose to break — it was a rule that was never fully tested, or that stopped being tested once the system it lived in changed. An enterprise agreement gets renegotiated. A wage review lands. A configuration gets tweaked to fix one thing and quietly breaks another. Without a standing process to catch it, the gap between what the rules say and what the payroll system actually pays can run for years before anyone notices.

How TestAssure closes the gap

TestAssure automates testing for WFM systems like UKG Pro Workforce Management, so pay rules are verified on an ongoing basis rather than assumed correct:

• Test pay rules against real scenarios — leave loading, penalty rates, allowances, overtime
• Re-run the full suite after every change — a new enterprise agreement, an annual wage review, an upgrade, or a configuration tweak
• Keep the evidence — a documented audit trail showing the configuration was tested and passed

Interested in seeing how TestAssure can support your company in preventing payroll errors? Contact our team through the form below.