Why Universities are often caught up in wage underpayments

Recent times have seen several major Australian universities in the news for wage underpayment issues, from enforceable undertakings and remediation programs to penalties for record keeping failures.

But behind the headlines lies a pattern that payroll teams across all industries should understand. It’s not that universities are wilfully ‘wage stealing,’ it’s that their operational structure creates a perfectly complex payroll challenge.

What’s driving underpayment headlines in higher education?

The higher education sector is uniquely exposed to underpayment risks due to several intersecting factors:

1. Workforce structure: Casual work is everywhere
   Universities employ a large number of casual academic and professional staff. Every hour worked needs to be captured and paid precisely. There’s no salaried buffer to absorb discrepancies. In payroll terms, this means every minute matters.
2. Non standard entitlements and industrial complexity
   Academic roles come with ‘weird and wonderful’ conditions. Preparation time, marking duties that resemble piece rates, minimum engagement requirements, and varied allowances not seen in typical retail or hospitality settings. These entitlements are often defined in enterprise agreements that are highly bespoke compared to standard awards.
3. Work happens off the clock
   Unlike roles with defined shifts, academics choose when they work, after hours, weekends, at home, which increases the risk that timesheets will be incomplete or inaccurate, feeding incorrect data into payroll systems.
4. Honest interpretation errors happen
   Even experienced payroll professionals can disagree on how to interpret enterprise agreements. When instruments are intricate and poorly documented, reasonable minds can differ and that can lead to underpayments without bad intent.

Universities may attract more attention not because they’re unique in making mistakes but because:

• The sector is highly unionised, with active campaigns to surface underpayments.
• The Fair Work Ombudsman has declared higher education a priority area, and large remediation programs make for high profile cases.

This combination means that when a payroll issue is uncovered, there’s strong regulatory and union pressure to investigate, resolve, publicise and, where necessary, enter enforceable undertakings.

What this means for payroll professionals

Even if you don’t work in the higher education sector, there are lessons here for payroll teams everywhere:

Data integrity is your best defence
Accurate timesheets, clear classifications, and robust capture of hours worked, including unscheduled time, are crucial to preventing underpayments.

Complexity increases risk
The more bespoke the entitlements and instruments you’re managing, the greater the need for governance, training and audit controls.

Proactive compliance pays off
Where universities have self reported and cooperated with the Fair Work Ombudsman, they’ve often entered remediation programs that reduce penalties, a reminder that transparency and swift action matter.

As payroll professionals, it’s worth asking ourselves:

Are our systems and processes robust enough to cope with complexity?
Are we capturing every hour and interpreting every clause correctly?

The university sector may sit in the spotlight right now, but the underlying compliance challenges are universal. Understanding them helps all payroll teams stay ahead of risk and ensure every employee receives what they’re lawfully due.