New Criminal Underpayment Laws Now In Effect

As of January 1, 2025,  intentionally underpaying an employee’s wages or entitlements can now be a criminal offence. 

The Fairwork Ombudsman can investigate suspected criminal underpayment offences and can suitable matters for criminal prosecution. If a person is convicted of a criminal offence, a court can impose fines, prison time, or both.

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.

There are protections in place for businesses to avoid criminal prosecution. This includes the Voluntary Small Business Wage Compliance Code (Code) and cooperation agreements.

For more information, please read the following: New Criminal Underpayment Laws Have Started