The APA Group (ASX: APA) share price is in the red today after the company revealed newly identified payroll errors will leave a $32 million impact on its financial year 2022 earnings.
A review of the company's payroll has found errors related to seven enterprise agreements over a seven-year period.
The APA share price is currently down 1.6% on the back of the news, trading at $11.65.
For context, the S&P/ASX 200 Index (ASX: XJO) is up 0.11% right now.
Let's take a closer look at today's news from the energy infrastructure giant.
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APA share price slumps as $32m provision incurred
The APA share price is slipping on news its upcoming earnings will take a hit from numerous payroll errors.
The company's financial statements – set to be released on Wednesday – will include a $32 million provision resulting from the errors.
That represents an estimate of their impact over the seven years in which they occurred, including associated superannuation and interest payments to employee entitlements under all seven of the company's enterprise agreements.
The company kicked off a review into its payroll in financial year 2021 after finding errors related to two enterprise agreements. It noted the issues were primarily due to mistaken interpretation of the enterprise agreements. Most of the provision relates to periods prior to the last financial year.
APA CEO and managing director Rob Wheals apologised for the mistake, saying:
[APA] will work expeditiously to remediate, with interest, all affected current and former employees.
The company has voluntary disclosed the initial payroll review to the Fair Work Ombudsman. It has vowed to continue to work with the ombudsman to finalise remediations and rectified errors as quickly as possible.
APA has also begun analysis of payroll data and records covering the period and enterprise agreements, engaging expert consultants to support the review.
It anticipates that will take around 12 months to complete.
The APA share price has lifted around 15% year to date and approximately 19% over the last 12 months.
