An $8 million payroll compliance wake-up call for business owners

Nine years, 5,487 staff members, and over $8 million in unpaid wages. These staggering numbers are at the centre of the underpayment case that has led Griffith University (University) to enter into an Enforceable Undertaking (EU) with the Fair Work Ombudsman (FWO).

To address these compliance issues, Griffith University is backpaying $8.34 million for work conducted between July 2015 and June 2024. This figure includes more than $5.95 million in unpaid wages, superannuation, and interest, with individual underpayments ranging from less than one dollar to over $92,400. Additionally, the University will make a $175,000 contrition payment to the Cleaning Accountability Framework, a non-profit organisation dedicated to promoting fair labour standards for cleaners.

Below, we break down the details of the underpayment, explore the errors that led to it, and underscore the critical importance of prioritising payroll compliance.

What happened?

Griffith University self-reported the breaches to the FWO in March 2022, attributing the errors to inadequate training among course convenors and administrators, poor onboarding and record-keeping practices, systemic issues in payroll and a lack of automation and oversight resulting in human errors.

The affected staff, comprising academics, professionals, and fitness staff, worked across all six of Griffith University’s campuses, one of which is a virtual campus. The underpayments related to a range of entitlements, including:

• tutorial rates;
• PhD qualification allowances;
• proctoring rates;
• minimum engagement periods;
• incorrect progression between pay bands; and
• meal or shift allowances.

Unpacking the details of the Enforceable Undertaking

As part of the EU, the University has agreed to:

1. Repay all underpayments including interest and superannuation;
2. Upgrade payroll and record-keeping systems, ensuring changes are reported to the FWO;
3. Provide relevant compliance training to relevant staff;
4. Commission two independent audits at the University’s expense to verify ongoing compliance;
5. Initiate a complaint and review mechanism for payment issues;
6. Establish a tripartite consultative body between the University, its employees, and the National Tertiary Education Union;
7. Ensure the University’s governing council monitors compliance; and
8. Notify affected employees and the wider University community about the EU.

Fair Work Ombudsman Anna Booth noted that the University demonstrated a proactive and cooperative approach, which meant the University avoided more severe sanctions.

“This matter serves as a warning of the significant long-running problems that can result from an employer failing to have appropriate checks and balances. We expect universities, and all employers, to meet their legal obligations under their own enterprise agreements and underlying awards.”

Criminalisation of wage theft: why this case matters

The Albanese Government’s Closing Loopholes employment law reforms were introduced in January 2025, criminalising the intentional underpayment of wages and superannuation. Under these new laws, an employer commits an offence if:

• The employer is required to pay an amount to or for an employee under the Fair Work Act 2009 (Cth) (FW Act), a modern award, an enterprise agreement or another industrial instrument; and
• The employer engages in conduct that fails to pay the required amount to or for an employee in full, on or before the date when the payment is due.

While the University’s breaches occurred before these reforms, and don’t appear to have been deliberate, the EU shows an example of how employers can appropriately address breaches under increased scrutiny.

What are the broader implications for business owners?

Griffith University isn’t alone – this case is part of a sector-wide compliance reckoning. Many universities, including La Trobe University, the University of Melbourne, the University of Sydney, and the University of Technology Sydney, have all entered into Enforceable Undertakings with the FWO. Additionally, the FWO has secured court penalties against the University of Melbourne and has commenced legal action against the University of NSW.

The FWO is clear in their response: compliance failures rooted in systemic issues are no longer excusable, especially where these failures are intentional. Employers are no longer just at risk of reputational damage; they’re now also faced with potential criminal liability.

The key takeaways for employers include:

• Conducting a self-audit, promptly identifying any issues, disclosing them early, and taking steps to rectify them.
• Inadequate payroll systems, training deficiencies, and poor record-keeping are no longer valid excuses for underpayments; they’re now recognised as compliance risks.
• Deliberate underpayment of wages can lead to criminal liability.

Minimise payroll errors with our expert HR services. Here’s how Citation HR can help

Prevention is better than a cure – it’s much less costly, less damaging to reputation, and more efficient to pay employees correctly than to rectify underpayments. Consider investing in an efficient payroll system software and seeking advice from HR experts on what you should be paying your employees.

Let us take care of the complicated stuff so you can get back to doing what you do best – running your business.

The team at Citation HR offers award-winning payroll compliance services. If you’re not 100 per cent confident with your payroll processes or award/agreement interpretation, get in touch via our 24/7 Advice Line.

Not a Citation HR client and need some advice on managing underpayment risks? The team at Citation HR can support your business on a range of workplace matters. Contact us today to arrange a confidential, no-obligation chat.

About our author

Tuvini Jayakody is a Workplace Relations Advisor at Citation HR. She assists clients with a range of employment relations and compliance matters via the HR Advisory Service. She is currently studying for a Bachelor of Commerce and Laws.