The Post Primary Teachers' Association has launched a group legal action seeking compensation for members affected by the Novopay payroll system.
The PPTA executive, representing 18,000 members met over the weekend and decided to allow members to take collective legal action.
The move comes after Minister in charge of Novopay, Steven Joyce, released details of pay period 23, for January 23 until February 5.
Details showed the pay of more than 1600 staff were impacted.
PPTA president Angela Roberts said members' patience was wearing thin and sympathy from Mr Joyce isn't resolving the situation.
She said the PPTA would be seeking compensation for members for "the hurt, humiliation and financial suffering caused by the dysfunctional payroll system".
"Continued Novopay errors mean schools, students principals and administration staff are at the end of their tether," Mrs Roberts said.
Mr Joyce has ordered a draft technical audit to determine if Novopay's flaws are "terminal".
The Australian provider of Novopay, Talent2 rolled out the first of three software upgrades over the weekend.
PricewaterhouseCoopers confirmed 628 schools were involved, with 552 staff not paid as a result of problems with Novopay - 589 were underpaid and 521 were overpaid.
More than 800 calls were made to both the Education Ministry and the contact centre.
The PPTA are expecting to receive details of a survival package for schools at a Education Ministry briefing on Thursday.
The union is still deciding if the legal action will be taken against the Government or Talent2.