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The True Cost of Payroll Non-Compliance at the University of Sydney

The University of Sydney’s recent payroll crisis highlights a familiar issue for payroll professionals: the high cost of non-compliance. Over the past four years, the university has spent $21.6 million on payroll reviews and remediation, much of which went to external consultants like PwC, rather than directly compensating affected staff. This hefty expenditure has sparked criticism, as the university has paid only $2.8 million to 514 casual employees, while professional staff received $17.4 million in total.

Underpayments are an ongoing issue in Australia, particularly in industries that rely on casual work, and universities are facing increased scrutiny for governance practices and employee fairness. Greens MLC Abigail Boyd has condemned this pattern, questioning whether institutions like the University of Sydney are truly upholding their ethical and legal obligations. “They’ve gotten away with so much, for so long, with next to no accountability,” Boyd said, advocating for a formal investigation into university governance.

The University’s latest report reveals an additional $7.4 million liability for current employee underpayments, with an estimated $70.1 million yet to be paid to casual academic staff. These figures point to a pervasive issue that impacts trust in these institutions.

A University of Sydney spokesperson affirmed their commitment to compensating employees accurately, though acknowledged the complexity of the remediation process. While external consultants can bring independent oversight, such reliance also raises questions about the university’s internal payroll expertise and its ability to proactively manage compliance risks.

Australian Payroll Association Director Tracy Angwin weighed in on the issue, stating, “Investing in good processes, well-trained payroll teams, and regular payroll audits is far cheaper—and more sustainable—than turning to costly consultants to fix compliance issues. Strong internal payroll practices are not only more cost-effective but foster accuracy and accountability, which employees trust.”

For payroll professionals, compliance goes beyond rectifying mistakes—it’s about fostering employee confidence and avoiding high consultancy fees. When payroll issues are outsourced, the cost of non-compliance can escalate well beyond initial estimates. Greens MP and former University of Sydney student Tamara Smith also criticised the university’s allocation of funds, pointing to a disparity between executive pay and the budget for wage recovery: “Universities are spending about 60 cents of every dollar on executive pay, yet they’re choosing to pay consultants over fairly compensating casual academics.”

The University of Sydney’s situation underscores the importance of robust internal payroll expertise. For payroll professionals, maintaining compliance in-house isn’t just about cost savings on external consultants; it’s about establishing a sustainable, trusted payroll operation that values and supports the institution’s most important asset: its people.

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