1.1 What has happened?
- The University initiated an independent review of our payment practices for casual staff in December 2020 because of concerns about underpayments in the higher education sector. At the time this internal review was established, the University had not received any reports of underpayments or claims by staff.
- The review was extremely complex and diligent and has now been completed.
The review assessed more than 1.2 million rows of timesheet data from more than 11,000 employees over the six years reviewed.
- The review identified some issues with our current systems and processes which have led to underpayment of some casual staff members. These discrepancies relate to incorrect application of the Collective Agreement wage codes within timesheets between PHD rates, initial and repeat lectures/tutorials for our academic casual staff and minimum engagement periods for our professional casual staff. In addition, the University continues to review all payments made to casual staff for marking activities.
- This review has been undertaken for a period of 6 years, currently to 30 June 2021, with those payments to be made this year. The additional period of 1 July to 31 December will be calculated following the end of that period.
- We are contacting all impacted staff. Our highest priority throughout this process is to ensure our staff receive the payments they are entitled to.
1.2 What did the review find?
- In total there have been underpayments of $3,540,000. This includes interest, superannuation and interest on superannuation
- This figure excludes marking payments and payments between 1 July and 31 December 2021 which both will be paid in early 2022.
- The review assessed more than1.2 million rows of timesheet data from more than 11,000 employees over the six years reviewed.
1.3 What casual payments have been impacted?
The main causes of these underpayments include:
- Not enforcing the minimum engagement period for professional casual staff members
- Payment for staff who have a PhD using the non-PhD rate rather than the PhD rate
- Incorrect use of standard vs repeat lecture and tutorial rates
- Incorrect use of “normal” preparation compared with “little” preparation for Clinical Nurse Education.
- Payment for marking – both where the marking does or does not require a significant exercise of academic judgment and the appropriate amount of time allocated for marking - will be confirmed in 2022.
1.4 What has La Trobe University done to fix this?
We appointed professional services firm KPMG to independently advise the University based on its review of casual payments for the period 1 July 2015 to 31 December 2021. KPMG has further assisted the University to determine amounts owing, plus super and interest, to any impacted staff members.
The backdated payments, plus interest, for the period up to 30 June 2021 have been calculated for each impacted staff member and we are contacting all impacted current and former staff to advise them of their adjusted payment.
Some actions we are taking include simplifying confusing and complex processes and systems to make it easier for staff and their line managers to ensure accurate records; an improved induction and onboarding program for casual staff to ensure they are aware of the correct payment structures; and improved technology to remove the chances of human error. We continue to also review the time allocated for marking for each discipline to ensure fairness across disciplines so that staff are compensated for their time and effort appropriately.
Information for impacted staff
2.1 I’ve been advised I’m impacted - what does this mean for me?
Impacted current casual employees have been provided with information about any underpayment relevant to them. The information provided gives each item of underpayment along with interest and superannuation.
Former casual staff identified as impacted who we have contact details for will also be contacted by the University.
2.2 Will I receive interest on my payment?
Yes, interest is included in the payments being made. The University has paid an interest rate of 5% on all underpayments. In addition, superannuation is being paid on the underpayments and interest is being paid at 10% on this amount. These interest amounts reflect the interest that staff would have received in both these areas. Each impacted individual will receive information from La Trobe that will detail their total underpayment, interest, and superannuation related to the payment.
2.3 Will my superannuation fund be given details of the payment or just a lump sum?
Impacted staff will have a payment made to their nominated bank account and to their superannuation accumulation account by La Trobe University.
2.4 I have another superannuation account in addition to my UniSuper account – can I select which fund this is paid into?
If you have a UniSuper account, La Trobe will deposit your top-up payment into your UniSuper accumulation superannuation fund.
La Trobe will deposit the top-up payment into another superannuation accumulation fund only in the instance where an individual does not have a UniSuper account or their UniSuper account is now closed.
2.5 Will I be taxed higher for this lump sum payment?
The payment made to you in December 2021 will be taxed as a normal payment. Payments above $1200 and relating to a period which is more than 12 months before the payment date can be classified as a Lump Sum Payment in Arrears (LSPIA) by the ATO. Before we complete the year end process we will split the total payment made to you (including December 2021 and any payments made in 2022) between LSPIA and normal wage codes which may entitle you to a tax offset in your 2022 tax return. The University is unable to provide you with any financial advice. It is recommended you refer to the ATO website for further information.
2.6 Will I be taxed for excess superannuation contributions due to the lump sum payment?
Due to the complexities of tax law and variables related to an employee’s unique circumstances (which may include personal contributions to superannuation, secondary income etc), La Trobe University is unable to advise as to whether the additional top-up contribution paid into employee’s superannuation account will exceed the threshold of their annual superannuation contributions.
After you have lodged your 2021-2022 tax return, in the event you are contacted by the Australian Taxation Office (ATO) regarding tax for excess contributions, you can fill out an Application – excess contributions determination and submit this form to the ATO. This application is to attest that your super contributions exceeded the cap due to special circumstances and requests that some or all of your contributions be disregarded or reallocated to another year.
There is no need to fill out this form unless you are directly contacted by the ATO regarding excess superannuation contributions which can take approx. 6 months after you complete your 2022 Tax Return. In the event this occurs, La Trobe can provide you with wording you can use in your statement explaining the superannuation additional contributions, the context in which they occurred and the years they pertain to. For further information or support regarding this, please contact the HR Assist team if you are contacted by the ATO following the submission of your 2021-2022 tax return.
2.7 What are you doing for former employees?
We will be contacting impacted former casual staff members who we have contact details for.
We encourage staff who remain in contact with former colleagues to let them know of this review so they have opportunity to get in contact with our team. Any individual employed at La Trobe University between 1 July 2015 and 31 December 2021 is welcome to contact our HR Assist team via email on email@example.com to check whether they have been impacted.