'From 1 January 2025, intentionally underpaying an employee's wages or entitlements can be a criminal offence'
Australia's criminal underpayment laws will take effect in January 2025, the Fair Work Ombudsman (FWO) reminded on Monday.
"From 1 January 2025, intentionally underpaying an employee's wages or entitlements can be a criminal offence. This doesn't include honest mistakes," the FWO said in a statement.
According to the FWO, intentional conduct includes:
The FWO's role will be to 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," it said.
To help employers remain compliant with legislation, a Voluntary Small Business Wage Compliance Code has been released to outline efforts that employers can make to correctly pay full entitlements for their employees.
The FWO said the Code and cooperation agreements will help businesses avoid criminal prosecution.
"We can't refer a small business employer's conduct for possible criminal prosecution if we're satisfied that they've complied with the Code in relation to an underpayment," the FWO said.
But in referring to the Code, the FWO reminded that it isn't a checklist.
"This means that a small business employer doesn't need to show they meet all the factors. There is also not one factor that must be met to have complied with the Code," the FWO said. "Where an underpayment has occurred, we'll look at the overall picture and the business' particular circumstances to determine whether the Code has been satisfied."
Alongside the Code, a supporting guide to help employers understand it was also released by the FWO.
"Use the Code and our supporting guide to make sure you’re paying employees correctly," the FWO said.
The criminalisation of wage underpayments is part of the reforms introduced in the "Closing Loopholes" laws.
Other reforms under the legislation include the changes to casual employment, a new right to disconnect, independent contractor changes, and new regulated worker rules.
