[Australia] New criminal underpayment laws now in force

In Australia, new criminal underpayment laws commenced on January 1, 2025. Fair Work Ombudsman details what has changed.

From January 1, 2025, intentionally underpaying an employee’s wages or entitlements can be considered a criminal offence. Honest mistakes will not be classified in the same way.

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

Protections are reportedly in place to help businesses avoid criminal prosecution. These include the Voluntary Small Business Wage Compliance Code (Code) and cooperation agreements.

Code and Guide

The Ombudsman cannot refer a small business employer’s conduct for possible criminal prosecution if it is satisfied that they’ve complied with the Code in relation to an underpayment.

The Guide to Paying Employees Correctly and the Code are available here, offering practical advice and tools, including a checklist, examples and best practice tips, to support businesses in paying their employees correctly and complying with the Code.

A small business employer will be in compliance with the Code if they didn’t intend to underpay their employees. This will be assessed by looking at several factors which won’t be new to compliant employers since they are steps that many already take as part of good business practice.

Businesses of all sizes can use the Code and supporting guide to ensure they are paying their employees correctly and quickly address any issues as they arise.

Download a copy of the Code and supporting guide at Voluntary Small Business Wage Compliance Code.

Cooperation agreements

A cooperation agreement is a written agreement between the Fair Work Ombudsman and someone who has told it that they have engaged in conduct that may amount to the criminal underpayment offence. While it is in force, the Ombudsman cannot refer conduct outlined in that agreement for possible criminal prosecution but it may still consider civil enforcement options if necessary.

Download the new Guide to cooperation agreements here.

Source: Fair Work Ombudsman

(Links via original reporting)

In Australia, new criminal underpayment laws commenced on January 1, 2025. Fair Work Ombudsman details what has changed.

From January 1, 2025, intentionally underpaying an employee’s wages or entitlements can be considered a criminal offence. Honest mistakes will not be classified in the same way.

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

Protections are reportedly in place to help businesses avoid criminal prosecution. These include the Voluntary Small Business Wage Compliance Code (Code) and cooperation agreements.

Code and Guide

The Ombudsman cannot refer a small business employer’s conduct for possible criminal prosecution if it is satisfied that they’ve complied with the Code in relation to an underpayment.

The Guide to Paying Employees Correctly and the Code are available here, offering practical advice and tools, including a checklist, examples and best practice tips, to support businesses in paying their employees correctly and complying with the Code.

A small business employer will be in compliance with the Code if they didn’t intend to underpay their employees. This will be assessed by looking at several factors which won’t be new to compliant employers since they are steps that many already take as part of good business practice.

Businesses of all sizes can use the Code and supporting guide to ensure they are paying their employees correctly and quickly address any issues as they arise.

Download a copy of the Code and supporting guide at Voluntary Small Business Wage Compliance Code.

Cooperation agreements

A cooperation agreement is a written agreement between the Fair Work Ombudsman and someone who has told it that they have engaged in conduct that may amount to the criminal underpayment offence. While it is in force, the Ombudsman cannot refer conduct outlined in that agreement for possible criminal prosecution but it may still consider civil enforcement options if necessary.

Download the new Guide to cooperation agreements here.

Source: Fair Work Ombudsman

(Links via original reporting)