Pay problems hit hard

Payroll Errors cause hardships among younger workforce.

A third (33 per cent) of 16-24-year-olds in the UK and Ireland have barely been able to afford food in the last 12 months because of mistakes or late payment of their wages according to research from MHR International. The impact of these errors has in some cases led to almost half of them taking out a loan or credit card to cover the costs.

The survey of 1002 employees also shows that not only have young adults taken the brunt of the economic impact of the pandemic, but the majority (53 per cent) in employment have been paid incorrectly or late due to payroll errors.

“It is shocking that during an already difficult year, so many young adults have been short of food and other necessities because of payroll mistakes,” said Stuart Price, product manager, MHR. “Younger workers are more likely to be on zero-hours contracts or other flexible terms of employment which make it difficult for some employers to get pay right, especially if they are using government furlough or wage subsidy schemes and manual payroll processes. Undoubtedly payroll teams have faced significant challenges over the last year with last-minute changes to government schemes and guidance, however it is simply unacceptable for young employees to be relying on credit and struggling to buy food because they haven’t been paid correctly.”

Nearly one in two in this age group blamed the pandemic for leaving them out of pocket because of mistakes or late payment, this figure rises to 75 per cent for those working in the arts and culture sector. Of the 16-24-year-olds experiencing pay problems, 11 per cent were paid both late and the incorrect amount, 22 per cent were paid incorrectly, and 20 per cent were paid late.

“Employers should take all steps possible to avoid these mistakes,” said Stuart. “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.”

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