New Criminal Underpayment Laws: What You Need to Know
As of 1 January 2025, significant changes have come into effect regarding wage underpayments in Australia. These laws aim to strengthen protections for employees and hold businesses accountable for intentional underpayment of wages or entitlements.
Here’s what you need to know about the new criminal underpayment laws and how they could impact your business.
What’s Changed?
The intentional underpayment of wages or entitlements is now classified as a criminal offence.
The Fair Work Ombudsman (FWO) is empowered to:
Investigate suspected criminal underpayment offences.
Refer suitable matters for criminal prosecution.
If convicted, penalties can include:
Fines.
Imprisonment.
Or both.
Learn more about the changes on the Fair Work Ombudsman website.
Small Businesses and the Voluntary Compliance Code
Small business employers can avoid potential criminal prosecution by complying with the Voluntary Small Business Wage Compliance Code.
The Code offers:
Practical advice.
Tools like checklists, examples, and best practice tips to ensure employees are paid correctly.
Take Action:
Download the Code and supporting guide from the Voluntary Small Business Wage Compliance Code page.
Cooperation Agreements
If a business voluntarily discloses conduct that may qualify as a criminal underpayment offence, they may enter into a cooperation agreement with the Fair Work Ombudsman.
Benefits of a cooperation agreement include:
Written acknowledgement of the disclosed conduct.
Protection from referral for criminal prosecution for actions outlined in the agreement while it remains in force.
Learn More:
Visit the Cooperation Agreements page for details on how these agreements work and the steps involved.
What Should You Do Now?
To prepare and ensure compliance with the new laws:
Understand the Changes: Familiarise yourself with the details of the new legislation.
Review Payroll Practices: Ensure your employees are being paid correctly, including all entitlements.
Utilise Resources: Download and implement the tools available in the Wage Compliance Code.
Seek Advice: If in doubt, consult with a legal advisor specialising in payroll legislation to avoid unintentional errors.
Get More Information:
For further details, visit the New Criminal Underpayment Laws page.
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By understanding and acting on these changes, you can protect your business while ensuring fair treatment of employees.
Disclaimer: This content provides general information only, current at the time of production. Any advice in it has been prepared without taking into account your personal circumstances. You should seek professional advice before acting on any material.