Bringing in criminal penalties for underpaying staff marks a big change in how employers are held accountable. In recent years, a number of large companies have uncovered serious issues with pay, including cases of underpayment.
The Fair Work Legislation Amendment (Closing Loopholes) Act 2023 has introduced a new criminal offence in relation to certain types of intentional wage and entitlement underpayments into the Fair Work Act.
From 1 January 2025, some employers may face serious criminal penalties if they fail to pay their employees properly. Importantly, if there’s evidence of intent and the behaviour continues after this date, employers can still be held accountable for actions that began before the new laws came into effect.
The new criminal offence of wage theft applies to intentional conduct and is aimed at addressing deliberate underpayment practices. Its intention is not to capture inadvertent errors or genuine mistakes.
Companies can be held criminally liable for the actions of their boards, senior managers, or as a result of having a corporate culture of non-compliance with workplace wage and entitlement laws. Also, individuals, including directors, managers, or payroll personnel, may also face charges for related criminal offences such as complicity, incitement, or conspiracy.
This highlights why it’s so important for employers to have strong payroll systems, promote a culture that follows the rules, and act quickly to fix any problems before they turn into legal trouble.
Access your free Guide
If you want to find out more, you can access here the Criminal Wage Theft Guide. South Australian Business Chamber members can access a range of other Employer Workplace Resources. These resources are intended to help employers navigate key legislative changes and offer practical advice for complying with obligations.
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Employers and businesses are strongly encouraged to seek individual advice tailored to their specific needs contact our Business Advice Hotline today on (08) 8300 0000 (select option 1).
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