Australia’s New Wage Theft Laws: What Employers and Payroll Managers Must Know
                     Australia’s New 
Wage Theft Laws: 
What Employers 
and Payroll 
Managers Must 
Know
On 1 January 2025, Australia introduced landmark 
legislation aimed at combating wage theft—intentional 
underpayment of wages. These new laws elevate wage 
theft to a criminal offence, sending a strong message 
that deliberate underpayment will not be tolerated. 
Employers and payroll managers must act now to 
understand these laws, ensure compliance, and avoid 
significant penalties.
Key Features of the Laws
• Criminalisation of Wage Theft
Intentional underpayment is now a criminal offence. 
Employers found guilty may face fines, and 
individuals—including payroll managers—risk 
imprisonment.
• Clear Definitions
Wage theft includes deliberate failures to pay wages, 
superannuation, entitlements, or penalty rates in line 
with industrial agreements or legal requirements.
• Increased Penalties
Severe fines for organisations and personal liability 
for responsible individuals are now in place.
• Enhanced Enforcement
Regulators like the Fair Work Ombudsman have 
expanded powers to investigate wage theft claims.
• Employee Protections
Workers are shielded from retaliation or unfair 
dismissal when raising wage theft concerns.
Who is Impacted?
These laws apply to all Australian employers, regardless 
of industry or size. However, criminal charges only 
apply to deliberate underpayment, not genuine errors.
Risks of Non-Compliance
• Penalties include:
• Fines in the millions of dollars
• Up to 10 years’ imprisonment for individuals
• Severe reputational damage, eroding trust among 
employees and stakeholders
Steps for Payroll Compliance
• Audit Payroll Systems: Regularly review employee 
records and payments to detect and correct 
discrepancies.
• Review Agreements: Ensure contracts and awards 
are correctly interpreted and applied.
• Invest in Training: Keep payroll professionals 
updated on laws and regulations.
• Automate Processes: Use modern payroll software 
to minimise errors and stay compliant with changes.
• Maintain Records: Keep clear, detailed 
documentation to support audits or investigations.
• Seek Expert Advice: Engage a payroll consultant or 
lawyer if you’re unsure about compliance.
Common Errors to Avoid
Even unintentional errors can lead to costly back 
payments and penalties. Be cautious of:
• Misinterpreting awards or agreements
• Incorrect employee classifications
• Failing to update pay rates
• Miscalculating leave or penalty rates
• Overlooking superannuation obligations
Why Compliance Matters
Payroll compliance is no longer optional; it is critical. 
The new laws emphasise fairness, transparency, and 
ethical treatment of employees. By strengthening 
payroll systems and fostering accountability, businesses 
can protect their reputation, mitigate risks, and build 
trust with their workforce.
Final Thoughts
Australia’s wage theft laws are a turning point for 
payroll compliance. Employers and payroll managers 
must act now to align with the new legal framework. 
Remember, ignorance is no defence, and the stakes are 
high.
Compliance is not just a legal necessity—it’s an 
investment in your organisation’s success and integrity.
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