11 February 2025
The new ‘wage theft’ legislation came into effect on 1 January 2025 criminalizing the intentional underpayment of employee wages and entitlements.
- Criminal Offense: deliberately underpaying employees is now a criminal act.
- Penalties: Prosecution leading to a criminal conviction can result in maximum penalties of:
- for individuals:
- a term of imprisonment not more than 10 years and/or:
- if the underpayment amount can be calculated: the greater of 3 times the underpayment amount and $1.65 million.
- for corporate or commonwealth entities:
- if the underpayment amount can be calculated: the greater of 3 times the underpayment amount and $8.25 million; or
- if the underpayment amount cannot be calculated: $8.25 million
- for individuals:
Recognizing the challenges small businesses may face, the government has introduced the Voluntary Small Business Wage Compliance Code.
Where the Fair Work Ombudsman is satisfied that a small business has complied with the code, they are unable to refer the business for criminal prosecution.
Employers should make sure that they are up to date with the ‘wage theft’ rules to ensure that they remain compliant. In particular, small business employers should take steps to ensure that they are complying with the code as an effective means of protecting themselves against prosecution.
If you would like to learn more about the ‘wage theft’ rules and the new code, get in touch.