Underpayment in tertiary education is rife, particularly in universities and private providers. The conditions that lead to underpayment are an increasing reliance on casual or sessional labour, who may be less likely to argue for their correct pay as a result of continuing job insecurity. The chronic underfunding of the sector is an ongoing problem.

Within universities, underpayment or wage theft often occurs when decision making and the responsibility to meet declining budgets is devolved to local levels. Faced with restricted budgets and retained demands, they look for opportunities to save money where they can. Sometimes there is an awareness that they cannot apply the payment rates in the way that they do, and sometimes it is a deliberate strategy.