At a glance
- Employers who intentionally underpay employees now commit a criminal offence.
- Companies may be fined up to AUD7,825,000 while individuals may be fined up to AUD1,565,000 or face up to ten years' imprisonment.
What is the offence?
A new offence which criminalises wage theft was introduced in the Fair Work Act 2009 (FWA) and took effect on 1 January 2025.
Employers commit criminal wage theft where they intentionally engage in conduct that results in them failing to provide employees with any payments in full, and by the date required to be paid under the FWA or a modern award or enterprise agreement.
Payments that are caught include wages; superannuation contributions; redundancy pay; leave payments; overtime; penalty rates; allowances; and leave loading. The offence does not cover payments that are solely contractual entitlements (eg bonuses and incentive arrangements).
The offence applies to intentional underpayments which have occurred since 1 January 2025 onwards, but also extends to conduct before this date where it formed part of a course of conduct.
Employers can self-report potential wage theft to the Fair Work Ombudsman (the national labour enforcement body) by entering into a cooperation agreement with it. In these circumstances, the Ombudsman may agree not to refer the conduct for prosecution.
However, this does not limit or prevent the Ombudsman from issuing compliance notices requiring workers to be repaid, or the employees, or relevant labour unions, from seeking civil penalties or repayment of amounts owed.
Penalties
For employers: If the court can determine the amount of underpayment, the greater of three times the amount of the underpayment and AUD7,825,000, or otherwise a penalty of up to AUD7,825,000.
For individuals involved in the offence: A maximum of ten years' imprisonment or, if the court can determine the underpayment, the greater of three times the underpayment amount and AUD1,565,000, or otherwise, a fine of up to AUD1,565,000.
More to explore
