Organisations find government legislation and employee awards difficult to interpret


New research from Australia’s leading network in payroll training, consultancy and advisory has found that more than nine in 10 organisations find government legislation or employee awards difficult to interpret, with most agreeing that many of these clauses need to be revised or made simpler.

The finding was derived from a survey of 520 payroll managers across a mix of large organisations and small-to-medium enterprises (SMEs) in various industries by the Australian Payroll Association. It revealed that 90 per cent of payroll managers found interpreting legislation or awards around employee entitlements and payments either confusing or contradictory. This is despite the fact that payroll managers are responsible for interpreting that same legislation and delivering accurate payments and entitlements to Australia’s workforce.  

Among these 90 per cent, more than half (58 per cent) had to seek advice from another payroll, HR or legal expert to clarify particular awards or pieces of legislation to enable them to pay employees correctly. A further 18 per cent approached the relevant government body to clarify the information, while 15 per cent attempted to work out the solution without help from an external expert.

Australian Payroll Association also found that 89 per cent of payroll managers felt that some of the clauses in these awards and legislation weren’t well thought out by legislators, making it difficult to interpret in the real world. A whopping 93 per cent agreed that some awards need to be revised or made simpler.


Tracy Angwin, CEO of the Australian Payroll Association, says, “Government legislation and employee awards are constantly changing, and often they can be confusing and difficult to understand. It is concerning those payroll managers – those who are involved in handling our pay, superannuation and leave entitlements – find the laws governing these things confusing and at times contradictory.


“A common example many find confusing is whether superannuation is payable on leave loading. This is so ambiguous that the ATO attempted to clarify their position on it in March this year, and advised that in recognition of it being confusing and not a straight-forward answer, it likely wouldn’t apply ‘Part 7 Penalties’ for non-compliance in the past. Together with my own experience in interpreting employee legislation, I believe it is important to re-examine and review some parts of the legislation to ensure that they can be understood and executed in the real world without ambiguity.”


SMEs most struggle to understand employee awards

The Australian Payroll Association also found that payroll managers in small businesses are calling the tax office or Fair Work for clarification more than large businesses. One in four (25 per cent) of payroll managers in businesses with up to 50 employees seek advice from the relevant government body, compared with just six per cent of those in large businesses (more than 1000 employees).

Meanwhile, large businesses were more likely to seek advice from payroll, HR or legal expert if they have difficulty understanding legislation or awards. Seventy (70) per cent of payroll managers in large organisations (more than 1000 employees) seek help from a payroll expert – not a government body – compared with 58 per cent of SMEs (51-200 employees) and 41 per cent of small businesses (up to 50 employees).


Awards and legislation more confusing in the scientific, technical services, education and retail industries

Payroll managers working in education, retail and the scientific and technical services were more likely to have trouble interpreting government legislation or employee awards – at 97 per cent, 96 per cent, and 92 per cent, respectively.


Tracy continues, “The ambiguity around awards and legislation – and the rate at which they are being amended – make it one of the most complex areas of business administration. For this reason, it is vital that organisations hire a qualified payroll professional, or an external managed payroll service provider, who can keep abreast of any changes in government legislation and employee awards. Payroll professionals can do this by regularly attending payroll training courses such as the online or in-person workshops available at the Australian Payroll Association.”


Australian Payroll Association’s pay rate results, taken from 520 payroll managers

Have you had to interpret any legislation or awards around employee entitlements or payments, that you have found confusing or contradictory?

% of respondents

Yes, and I have had to seek the advice of a payroll, HR or legal expert


Yes, and I have had to seek the advice of the relevant government body


Yes, and I have had to work out the solution without external expert help