The news that Slater and Gordon, one of Australia’s most well-known law firms, has suffered a payroll data breach allegedly linked to a former payroll manager should act as a wake-up call for every organisation. According to reports, confidential payroll data was leaked and anonymous emails were sent to hundreds of employees, suggesting the breach was an inside job. Although the investigation is ongoing, suspicion has fallen on a recently dismissed payroll manager with access to sensitive information.
This incident is not only a serious breach of privacy, but it also highlights the critical vulnerabilities that exist within many payroll environments. Payroll professionals manage sensitive financial and personal data, and when trust is broken, the consequences can be both reputational and operationally catastrophic.
The risks of insider threats
Payroll fraud doesn’t always involve siphoning money. It can just as easily be about sabotage, reputation damage or retaliation. As detailed in Profit from Payroll, deliberate misconduct, particularly from those with privileged access and insufficient oversight, is one of the greatest risks to payroll integrity . In Slater and Gordon’s case, the unauthorised access to and dissemination of private salary data could result in breaches of privacy law, loss of employee trust and significant internal upheaval.
This isn’t the first time a payroll manager has been implicated in a high-profile breach. From Clive Peeters to government departments, history shows that when segregation of duties is unclear and access controls are weak, the fallout can be severe and expensive.
What should organisations do to protect themselves?
- Review access and authorisation controls
No single individual should have end-to-end control over payroll data or processes. Segregation of duties is critical. As outlined in payroll fraud prevention best practice, clear documentation of roles and responsibilities, including delegations, is non-negotiable. - Conduct regular audits and process reviews
Annual reviews of your payroll systems, workflows and user access should be standard practice. This includes verifying that former employees have been completely removed from systems and that permissions match current role requirements. - Monitor behavioural red flags
Employees under financial stress, exhibiting secretive behaviour or developing inappropriate relationships within the business can be potential risks. While not all suspicious behaviour indicates fraud, being alert to these signs can help prevent damage before it occurs. - Use technology to your advantage
Modern payroll software offers audit trails, real-time alerts, and tamper-proof logs. If your system doesn’t provide visibility over changes or approvals, it’s time for an upgrade. Ensure automation is not just applied to efficiency but also to integrity and accountability. - Document everything
Every payroll process should be written down, mapped, and understood by more than one person. The reliance on individual memory or undocumented procedures creates gaps that can be exploited. - Provide professional training and qualifications
Qualified payroll professionals are more likely to uphold ethical standards and understand the full weight of compliance. Organisations that invest in formal payroll qualifications not only reduce risk but increase operational confidence.
Beyond compliance: building a culture of accountability
The Slater and Gordon incident is a painful reminder that payroll is not just about processing pay. It’s about trust, governance, and professional standards. Payroll departments must be supported as strategic functions, not administrative afterthoughts. That includes having the right people, processes and technology, and being vigilant to the risks that come with handling your organisation’s most sensitive data.
Organisations should see this not as a reason to fear payroll staff, but as a prompt to take payroll processes seriously. As always, a culture of professionalism, accountability and continuous improvement is your best defence.
