Three ways to protect your employees from wage theft

Wage theft has been an ongoing issue across the region in the past years, but the truth is, most businesses are not underpaying their employees on purpose. Often, underpayment happens because of seemingly innocuous things: a simple mis-click, attaching the wrong file, or an outdated payroll system.

In a research commissioned by Ascender in 2019 we found out that 1 in 5 Australian employees did not receive the right wages. Underpayment is not strictly an Australian problem, however. In a follow-up survey conducted across Asian businesses, we found that 15% of Malaysians and more than one in ten Singaporeans also experienced underpayment first-hand.

“It is up to leaders to continuously plan and test the robustness of their process and systems, ensuring they are trustworthy and compliant with regulatory requirements, so every step is done right first time, every time.” – Krishna Ramalingam, Head of Account Management, Ascender Asia Services.

Just recently, Singapore-based pastry chain Twelve Cupcakes pleaded guilty to underpaying their employees up to S$119,500, and SBS Transit has faced lawsuit from eight employees over wage dispute.

The numbers do not lie; underpayment can happen to anyone. 

Why is it so hard to get pay right?

One of the underlying issues that makes Asian businesses so susceptible to underpayment is the complexity of the industrial relations systems in the region. Factors such as minimum wages, penalty rates, allowances, overtime and loadings change from country to country, and it is already challenging to keep up with one, what more with two, three, or more across multiple countries?

Varying pay cycles also contribute to underpayment—the shorter the pay cycle, more likely employees are incorrectly paid since there would be less time for payroll departments to check and review every pay is right.

Wage theft is not an unsolvable problem

Fortunately, there are many ways businesses in Asia can ensure they are paying their employees correctly:

1. Payroll audits can help ensure employee records and time sheets align with their pay, and small issues can be spotted and rectified before they become big problems. The more often businesses conduct a ‘health check’, the more likely they can stay compliant.

2. Outsourcing your payroll to third-party experts can be particularly helpful for growing businesses who do not have a dedicated payroll department to manage the complexities of multi-country legislation across Asia. Through outsourcing, business leaders can focus more on their growth, stay compliant and ensure continuity, whilst ensuring their employees are paid correctly.

3. Investing in reliable payroll technology help ensure pay information is up to date and compliant to the latest industry awards and regulations. Clunky, outdated systems put you at risk of processing mistakes and “mis-clicks,” but newer payroll technology streamlines and automates the time-consuming administrative tasks, giving your people free time to focus on more meaningful tasks.

With pay being a fundamental part of employee engagement and well-being, wage theft and underpayment are serious issues that must not be swept under the rug.

Throughout all the disruptions in the past year, payroll remains essential. It is up to leaders to continuously plan and test the robustness of  their process and systems, ensuring they are trustworthy and compliant with regulatory requirements, so every step is done right first time, every time.

To learn more on how payroll technology can help in your payroll management, download Ascender’s free Essential Payroll Technology Checklist here.