Tech contractors finally get paid as ATO grants Plutus Payroll a break

Photo: Mark Dadswell/ Getty.

Tech contractors with their wages frozen in Plutus Payroll’s bank accounts can now exhale, with the Australian Taxation Office now agreeing to release those funds.

Under-siege Plutus Payroll, still bogged down in its dispute with the ATO, announced Wednesday to contractors that the tax office has at least allowed the wages to be released, saying the money should be with workers “within the next 72 hours”.

“We again sincerely apologise for the inconvenience which our dispute with the ATO has caused all of our valued contractors and clients. We thank the ATO for working extended hours and negotiating in good faith over the past few days,” the company said in an email to contractors and on its website.

Despite the gratitude expressed to the tax office, Plutus Payroll still maintains it should never have reached this stage.

“During the negotiation, we have maintained that our contractors, as third parties, should not have been caused the stress and suffering that the decision to garnish the Plutus bank accounts has caused,” the company stated.

“We are hopeful that this development shows you that we are not walking away from our responsibilities to you.”

The frozen wages debacle started suddenly on Monday last week when Plutus Payroll stripped its website of content and posted a single message saying its operations had been halted “due to a commercial dispute”. Out of its total base of 4,000 contractors, 1,000 to 2,000 people were reportedly owed money.

The company for several days refused to divulge the nature of the dispute, leading to speculation about it going into administration or receivership. On Friday evening, Plutus admitted that its battle was with the ATO, calling the tax office’s actions “draconian”, “unfair”, “aggressive” and “extraordinary” — and announced its intentions to take the matter to the federal court this week.

After negotiations were ordered by the judge, Plutus on Monday night changed its tone towards the ATO, saying it had an “important and vital role” in enforcing tax compliance.

While the wages have now been released, the payroll company’s battle with the tax office continues. The company stated on Wednesday is that the next step is to have superannuation contributions for contractors unfrozen.

“Contributions for the more recent pay periods are presently held in the Plutus bank account and it is our intention to continue to discuss this issue with the ATO and have these amounts paid within the statutory deadlines.”

While contractors had complained of not being able to contact Plutus during the last 10 days, the company assured that extra staff had now been put on customer service phone lines to answer enquiries relating to the released wages.

The ATO has declined to comment to Business Insider on individual cases.

Plutus Payroll has maintained that only payments due on April 27 to May 2 inclusive had been withheld. However, some contractors, through direct contact with Business Insider and on internet forums, have said they are owed money going back a fortnight, a month or even two months.

In response, a Plutus spokesperson told Business Insider last week that those people may be “citing legitimate and normal course of business issues with pay” but was definitely not affected by the current commercial dispute.

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