Slashdot Mirror

← Back to Stories (view on slashdot.org)

IT Contractors In Australia Are Not Being Paid Due To Dispute With Payroll Service (theregister.co.uk)

Posted by BeauHD on from the no-explanation-needed dept.

New submitter evolutionary writes: Plutus Payroll, an Australian payroll company, is refusing to pay contractors due to a dispute with companies using their services. Around 1,000 IT workers are unable to receive payment for services rendered. One may ask, "Where are the companies who actually hired the IT workers?" The Register reports: "This story starts with Australia's employment laws, which see lots of contractors officially employed by recruitment companies or payroll companies. The company at which the contractor works likes this arrangement as it means they don't have to put such people on their books. Recruitment companies and payroll companies charge for the service. Contractors generally like the convenience of having one employer even though they hop from gig to gig. The system requires fluid payments. Companies who hire contractors pay the recruiter, which either pays contractors direct or pays the payroll company contractors prefer. If the cash stops flowing, contractors get crunched. That's what's happened to around 1,000 contractors who elected to use Plutus as their paymasters: the company says it is in the midst of a completely unexplained 'dispute' that leaves it unable to pay contractors, or receive money from recruitment companies, but is still solvent. The Register has checked with the bank that Plutus clients say sends them their money -- the bank says it is aware of no dispute. One possible reason for the mess is that Plutus did not charge for its services. How it made money is therefore a mystery. Another scenario concerns the company's recent acquisition: perhaps its new owners are being denied access to some service Plutus could access as a standalone company. Plutus is saying nothing of substance about the situation. A spokesperson tells us the company deeply regrets the situation but won't divulge anything about the dispute and has offered no details about when contractors can expect resolution."

8 of 49 comments (clear)

  1. What a cock up... by __aaclcg7560 · · Score: 2

    After I was out of work for two years (2009-2010) and filed for Chapter Seven bankruptcy in 2011, I spent the next two years working multiple assignments from three different contracting agencies. All three used ADP for payroll. I would've been screwed if ADP threw a fit.

  2. Another great story by rudy_wayne · · Score: 2

    the company says it is in the midst of a completely unexplained 'dispute'

    the bank says it is aware of no dispute.

    Plutus did not charge for its services. How it made money is therefore a mystery.

    Plutus is saying nothing of substance about the situation.

    Slashdot: no information required.

    1. Re:Another great story by MightyMartian · · Score: 2

      Indeed. When a company says "Hey, I'll be your middle man and handle all your payments for you, for ABSOLUTELY FREE!!!!" one should run, not walk, from that company.

      And how would the company's bank know anything? It's not like banks generally look at a depositor's balance sheet unless the company's looking for a loan.

      It looks to me like some foolish and greedy people were taken in by a scam.

      --
      The world's burning. Moped Jesus spotted on I50. Details at 11.
    2. Re:Another great story by scdeimos · · Score: 2

      I'd be suspecting that their business model depends on short-term investments. i.e.: they receive weekly or fortnightly payments from the recruiting companies and use at least the superannuation portion of that on short-term money markets until they do the deposits into the superannuation accounts at the end of the month. This is much like banks do with cheques while they're "processing payments" for 3-7 days in our modern, instant transfers, electronic payments society.

    3. Re:Another great story by ChunderDownunder · · Score: 2

      I worked under such a scheme a number of years ago. The recruitment agency that were hiring me for a role didn't do their own payroll, rather I was employed by a third party.

      So small time recruiters probably pay these guys a fee for each contract. For workers that use their services directly, they can charge 0%, using the methods you describe.

      Bear in mind taxation - where money collected at the beginning of a financial year might only be required to be submitted to the federal government 11 months later at the end of the year.

    4. Re:Another great story by Immerman · · Score: 2

      If the supposed dispute had resulted in frozen assets, disputed transactions, or other explicitly financial disagreements, then the bank would almost certainly know of it.

      Whether they would discuss that with a nosy journalist is a completely different question.

      Still, my gut reaction is that if there's a genuine dispute, it's probably a matter of one executive demanding that another give back the money they stole from the till.

      --
      --- Most topics have many sides worth arguing, allow me to take one opposite you.
  3. Re:Dangerous by _merlin · · Score: 2

    That's the point of these companies, so that you're and employee from your PoV but a contractor from the actual employer's PoV. The payroll company handles super, payroll tax, etc. and you do a regular employee income tax return. The payroll company bills the actual employer for "consulting services" plus GST. They take the GST and their cut out before paying you. It's supposed to make life easier for everyone at the cost of a little inefficiency.

  4. Re:Fraud by del_diablo · · Score: 2

    In Norway, if you end up like this, there are worse things than merely not paying. Its getting a union the attention of this, because the Union has access to the legal legs needed to manpower such cases trough court, usually ending in trainwrecks if laws are broken. And if no payment for wages is made, they are broken badly.

    The most likely cases for Australia is that the 1000 employs are not organized in a proper Union, so when the payment stops, it doesn't end in court within days. And if thats the case, since this is public news, i don't get why a union hasn't voluntarily stopped in, done basic paperwork, and gone to court, to brute force Plutus Payroll to either default or pay.
    There is a lot of PR to be made