The University of Sydney’s recent revelation about its payroll expenses highlights a critical issue that payroll professionals understand all too well: compliance failures and the real costs of rectifying them. In the past four years, the university has shelled out a hefty $21.6 million on reviews and remediation efforts, a large portion of which went to external consultants, including PwC, rather than compensating its own staff. This outsized expenditure on consultants has sparked controversy, especially given that the university has repaid just $2.8 million to 514 affected casual employees, while thousands of professional staff have received a total of $17.4 million.
Wage underpayments in Australia are not new, particularly in sectors that rely heavily on casual staff. Universities are under increased scrutiny for their governance and commitment to fair employee treatment. Greens MLC Abigail Boyd has publicly condemned this practice, questioning whether such institutions are truly upholding their ethical and legal obligations. “They’ve gotten away with so much, for so long, with next to no accountability,” Boyd remarked, pressing for a formal inquiry into these institutions’ governance.
The University’s latest annual report projected an additional $7.4 million liability for ongoing employee underpayments, with a staggering $70.1 million estimated in unpaid wages for casual academic staff. The figures expose a systemic issue that continues to undermine trust in these institutions.
A spokesperson for the University of Sydney stated that compensating employees accurately is paramount and emphasised the complexity involved in verifying and remediating these underpayments. While external consultants can offer independent oversight and structure to the process, such dependence raises questions about internal payroll expertise and the ability of these institutions to prevent compliance risks proactively.
Tracy Angwin, Director of the Australian Payroll Association, commented on the situation, noting, “Investing in good processes, well trained and supported payroll teams, and regular payroll process and compliance audits is a lot cheaper—and far more sustainable—than having to turn to expensive consultants to fix compliance issues after the fact. When payroll operations are strengthened from within, it’s not only more cost effective but fosters a culture of accuracy and accountability that employees can trust.”
Payroll professionals understand that compliance is more than just a corrective exercise—it’s about maintaining the confidence of employees and avoiding exorbitant consultancy fees. When payroll is sidelined in favour of external auditors, the cost of non-compliance balloons, often well beyond the scope of initial remediation efforts. Tamara Smith, Greens MP and former University of Sydney student, criticised the institution’s use of funds, highlighting the contrast between executive salaries and the sum allocated for wage recovery: “Universities are spending about 60 cents of every dollar on executive pay, yet they choose to spend even more on consultants instead of fairly compensating their casual academics.”
This episode at the University of Sydney underscores the need for robust internal payroll practices and expertise to handle complex compliance requirements. As payroll professionals know, bringing compliance in-house isn’t just about saving on external consultancy—it’s about establishing a sustainable, trustworthy payroll operation that safeguards the institution’s most significant investment: its people.