3 Feb 2025

Worried about a wage underpayment issue? You should be.

Worried about a wage underpayment issue? You should be.

If your HR systems aren’t watertight, your business could be at risk of serious legal and financial consequences due to new wage theft laws that came in to effect on the 1st January 2025.


What is criminal wage theft?

Wage theft occurs when employers fail to pay employees their legal entitlements under Australia’s workplace relations system. Employers (bodies corporate or individuals) can now be criminally liable for intentionally underpaying their workers. This includes certain employee entitlements under the Fair Work Act 2009 (Cth) or a fair work legislative instrument, such as a modern award or enterprise agreement.


It can include;

  • Underpayment of salaries

  • Superannuation shortfalls

  • Unpaid penalty rates, shift allowances, or overtime

  • Missing rostered days off

  • Unpaid breaks

  • Unauthorised deductions


The Consequences of Wage Theft

The penalties for wage theft are severe:

  • Up to 10 years in prison for individuals

  • Fines up to $1.65 million for individuals

  • Fines up to $8.25 million for companies

  • A fine equal to three times the amount of the underpayment


Why Do Underpayments Happen?

One of the biggest challenges in preventing wage theft is Australia’s complex award system. With multiple pay rates, superannuation requirements, overtime allowances, and other entitlements, even well intentioned employers can make costly mistakes.

Key reasons for underpayments include:

  • Complex industrial relations laws: Many businesses struggle to navigate the intricate award system.

  • Inexperienced payroll teams: A lack of expertise can lead to errors.

  • Insufficient HR resources: Small teams may not have the capacity to manage compliance effectively.


Factors That May Affect Prosecution

Not all payroll errors result in prosecution. The government considers:

  • Intentional misconduct vs. honest mistakes: Accidental errors are less likely to be prosecuted.

  • Cooperation agreements: Employers who self report underpayments and work with the Fair Work Ombudsman (FWO) may receive more lenient treatment.

  • Employee circumstances: Factors such as classification, qualifications, hours, and location can impact legal outcomes.


How to Prevent Wage Theft & Ensure Compliance

To avoid underpayments and protect your business, take proactive steps:

  • Conduct regular payroll audits

  • Seek professional advice

  • Maintain accurate records

  • Educate your payroll and HR teams


Final Thoughts

With increasing scrutiny on wage compliance, businesses should be working to prevent underpayments and mitigate risk. Given the potential for criminal charges and multi-million dollar fines, ensuring payroll compliance should be a top priority. Find out how using a specialist HR recruiter like Samuels Donegan can help you mitigate the risk of costly reputational damage or worse.

Related News & Insights


Related News & Insights


Webinar: The Lowdown & Salary Guide - Register Now!

Get an exclusive first look at the data and trends shaping the HR industry and what they mean for you and your career in two exciting webinar sessions.

Webinar: The Lowdown & Salary Guide - Register Now!

Get an exclusive first look at the data and trends shaping the HR industry and what they mean for you and your career in two exciting webinar sessions.

Webinar: The Lowdown & Salary Guide - Register Now!

Get an exclusive first look at the data and trends shaping the HR industry and what they mean for you and your career in two exciting webinar sessions.

Webinar: The Lowdown & Salary Guide - Register Now!

Get an exclusive first look at the data and trends shaping the HR industry and what they mean for you and your career in two exciting webinar sessions.

Meet SD's 'Pup-terns'!

In celebration of International Dog Day (Aug. 26th), get to know our four-legged colleagues (and their cheeky HR violations!)

Meet SD's 'Pup-terns'!

In celebration of International Dog Day (Aug. 26th), get to know our four-legged colleagues (and their cheeky HR violations!)

Meet SD's 'Pup-terns'!

In celebration of International Dog Day (Aug. 26th), get to know our four-legged colleagues (and their cheeky HR violations!)

Meet SD's 'Pup-terns'!

In celebration of International Dog Day (Aug. 26th), get to know our four-legged colleagues (and their cheeky HR violations!)

black smartphone near person
black smartphone near person

From Task Ticker to Trusted Partner

Ever seen an HRBP role that was meant to be strategic but ends up chasing onboarding forms and fixing contracts? Here's what's getting in there way and how to overcome it.

black smartphone near person
black smartphone near person

From Task Ticker to Trusted Partner

Ever seen an HRBP role that was meant to be strategic but ends up chasing onboarding forms and fixing contracts? Here's what's getting in there way and how to overcome it.

black smartphone near person
black smartphone near person

From Task Ticker to Trusted Partner

Ever seen an HRBP role that was meant to be strategic but ends up chasing onboarding forms and fixing contracts? Here's what's getting in there way and how to overcome it.

black smartphone near person
black smartphone near person

From Task Ticker to Trusted Partner

Ever seen an HRBP role that was meant to be strategic but ends up chasing onboarding forms and fixing contracts? Here's what's getting in there way and how to overcome it.

you got this signage on desk
you got this signage on desk

Winter Slump or Winter Reset? Tips For Surviving The Winter Blues

5 tips for supporting motivation, wellbeing, and productivity during the colder months.

you got this signage on desk
you got this signage on desk

Winter Slump or Winter Reset? Tips For Surviving The Winter Blues

5 tips for supporting motivation, wellbeing, and productivity during the colder months.

you got this signage on desk
you got this signage on desk

Winter Slump or Winter Reset? Tips For Surviving The Winter Blues

5 tips for supporting motivation, wellbeing, and productivity during the colder months.

you got this signage on desk
you got this signage on desk

Winter Slump or Winter Reset? Tips For Surviving The Winter Blues

5 tips for supporting motivation, wellbeing, and productivity during the colder months.

MacBook Pro near white open book
MacBook Pro near white open book

Your Mid-Year Reality Check

Reflecting on progress against annual goals and how to recalibrate for the rest of the year.

MacBook Pro near white open book
MacBook Pro near white open book

Your Mid-Year Reality Check

Reflecting on progress against annual goals and how to recalibrate for the rest of the year.

MacBook Pro near white open book
MacBook Pro near white open book

Your Mid-Year Reality Check

Reflecting on progress against annual goals and how to recalibrate for the rest of the year.

MacBook Pro near white open book
MacBook Pro near white open book

Your Mid-Year Reality Check

Reflecting on progress against annual goals and how to recalibrate for the rest of the year.

Winner: Sourcr 2025 Best Agency - Human Resources, Victoria

Samuels Donegan has just been named Sourcr 2025 Best Agency - Human Resources, Victoria, and we couldn't be happier!

Winner: Sourcr 2025 Best Agency - Human Resources, Victoria

Samuels Donegan has just been named Sourcr 2025 Best Agency - Human Resources, Victoria, and we couldn't be happier!

Winner: Sourcr 2025 Best Agency - Human Resources, Victoria

Samuels Donegan has just been named Sourcr 2025 Best Agency - Human Resources, Victoria, and we couldn't be happier!

Winner: Sourcr 2025 Best Agency - Human Resources, Victoria

Samuels Donegan has just been named Sourcr 2025 Best Agency - Human Resources, Victoria, and we couldn't be happier!

I’m a Jobseeker

Submit your CV and let's find you your perfect match.

I’m an Employer

Find your next dream hire with us.