Forced To Borrow Due To Payroll Errors

29 Mar 2021 | 09.21 am

Forced To Borrow Due To Payroll Errors

MHR finds half of young workers paid late or the wrong amount

29 Mar 2021 | 09.21 am

A third of young workers were forced to take out loans for necessities during the pandemic due to being paid late or being short-changed in their pay packets.

A survey by HR software and consultancy company MHR International has revealed that 33% of 16-24-year-olds in Ireland and Britain have barely been able to afford food in the last 12 months because of mistakes or late payment of their wages, forcing almost half of them to take out a loan or credit card to cover costs

Young adults have taken the brunt of the economic impact of the pandemic, says MHR, and the majority (53%) in employment have been paid incorrectly or late due to payroll errors.

General manager Ireland Eamon Rheinisch said: “Younger workers are more likely to be on flexible terms of employment, which makes it difficult for some employers to get pay right, especially if they are using wage subsidy schemes and manual payroll processes. 

“Undoubtedly payroll teams have faced significant challenges over the last year, but it is simply unacceptable for young employees to be relying on credit and struggling to cover essential living costs because they haven’t been paid correctly.”

Nearly half in the cohort blamed the pandemic for leaving them out of pocket because of mistakes or late payment, rising to 75% for those working in the arts and culture sector. Of those experiencing pay problems, 11% were paid both late and with the incorrect amount, 22% were paid incorrectly, and 20% were paid late.

Rheinisch added: “Employers should take all steps possible to avoid these mistakes. Employees regularly paid late or incorrectly are unlikely to be loyal, engaged and committed to the businesses they work for —  which ultimately will result in retention issues.”

The survey embraced over 1,000 employees, and in parallel 250 HR and payroll managers were polled. Their replies indicate that 94% of businesses admit that their teams run into problems processing payroll in the last 12 months, with 91% making errors every month. More than a quarter (27%) of those surveyed also said they have either underpaid or over-paid employees. 

The research found that 32% of payroll teams make ‘human’ or ‘admin’ errors and 28% struggle with the repetitive nature of the tasks required to update payroll details to adjust to new employment or business support provisions.

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