Criminal Offense To Underpay Wages

From the 1st of January 2025, intentional underpayment of wages by employers will be criminalized as part of reforms to workplace rules. 

Employers will be in violation if:

• they purposefully engage in behavior that causes them to fail to pay those amounts to or for the employee on or before the day they are due to be paid,
• whether they are required to pay an amount to an employee (such as wages), on behalf of or for the benefit of an employee (such as superannuation) under the Fair Work Act, or an industrial instrument.

Exceptions

These provisions don’t apply to certain employees for:

• superannuation contributions
• payment for taking long service leave payments
• payment for taking leave connected with being the victim of a crime
• payment for taking jury duty leave or for emergency services duties.

These laws also don’t apply to employers who:

• unintentionally underpay their employees, or
• pay incorrect amounts by mistake.

Penalties

For a company

The following penalties will apply:

• if the court can determine the underpayment, the greater of 3 times the amount of the underpayment and $7.825 million, or
• if the court can’t determine the underpayment, $7.825 million.

For an individual

The following penalties will apply:

• maximum of 10 years in prison
• if the court can determine the underpayment, the greater of 3 times the amount of the underpayment and $1.565 million, or
• if the court can’t determine the underpayment, $1.565 million.

Fair Work Ombudsman will investigate suspected underpayment offenses. 

For more information:  Criminalising Wage Underpayments