Employee’s guide: 5 steps to spot wage underpayment

Wage underpayment is more common than many employees realise, often going unnoticed until it is too late.

Whether it is unpaid overtime, or simply not receiving the minimum wage, missing out on your rightful earnings can have a significant impact.

While legislation exists to protect employees, understanding how to identify and address underpayment can be challenging. So, how can you as an employee determine if you are being short-changed?

Here are five essential steps to help you take control of your pay:

1. Track your hours worked

Start by keeping a precise record of your hours worked, including start and finish times, breaks, and overtime. Use a notebook, a spreadsheet, or a time-tracking app—whatever works best for you. While it may seem tedious, having an accurate log is the first step in spotting pay discrepancies.

2. Compare your payslips

Your payslip should reflect the hours you have worked and the rate you are entitled to. Regularly check for inconsistencies in hours paid, pay rate, deductions, and leave accruals. Calculate what you should be earning, factoring in overtime, penalty rates, and allowances. A direct comparison with your records can quickly reveal any underpayment.

3. Understand your entitlements and review your contract

Understanding your entitlements is crucial. Familiarise yourself with federal and state/territory employment laws, including minimum wage, overtime rates, and leave entitlements. The Fair Work Ombudsman is a valuable resource. Also, review your employment contract—it should clearly outline your pay rate, hours, job classification, and any additional conditions. Knowing your rights ensures you can confidently identify any discrepancies.

4. Document communications

If you suspect underpayment, documentation is key. Keep records of any conversations, emails, letters, or messages exchanged with your employer about your pay. Note dates, times, and details of discussions. Having a clear paper trail will be essential if you need to escalate the matter.

5. Raise the issue and seek support

If you identify a shortfall, address it with your employer first. Approach the conversation professionally, presenting your findings clearly. In many cases, payroll errors are unintentional and can be quickly rectified. However, if the issue is not resolved, seek advice from your union (if you are a member) or reach out to the Fair Work Ombudsman for guidance.

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Detecting underpayment requires vigilance and proactive effort, but by following these steps, you can confidently identify underpayment and take action—whether that means addressing the issue with your employer or seeking external support to ensure you receive what you are rightfully owed.