New criminal underpayment laws start 1 January 2025 – What you need to know

As we are all aware, the government is vigilant in pursuing non-compliance with employment laws.

Each week APAN receives notification from the Office of the Fair Work Ombudsman referring to businesses that have been fined for non-compliance.

• These businesses vary from salons, clinics, cafes, universities, hotels as well as franchises. The offending employer is not only required to rectify the inaccuracies to wages but also incur penalty fines that can often run into thousands of dollars.
• It is important to note that there is no insurance cover for a ‘fine’ as it is considered a violation of law.

Today, we received notification that the underpayment laws will be stepped up in 2025 bringing them into the “criminal law” category. If you are employing staff on wages, please review the following Fair Work Ombudsman notification.

• As of 1st January 2025, intentional underpayment of wages or entitlements can be classified as a criminal offence.

• 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.

• However, there are protections in place for businesses to avoid criminal prosecution. This includes the?Voluntary Small Business Wage Compliance Code?and cooperation agreements.

Code and guide

• Business owners are urged to review the new Code and Guide as Fair Work cannot refer a small business employer’s conduct for possible criminal prosecution?if they are satisfied that the business has complied with the Code?in relation to an underpayment.
• The CODE and the supporting GUIDE are now available for download?

By familiarising yourself and complying with the Code and the Guide you can ensure that your business will be protected from potential fines.

What can I do now?

We urge business owners to check out the following links and become familiar with their regulatory requirements:

• New criminal underpayment laws start 1 January 2025
• Changes to entry-level classifications in awards

If you require further assistance with payment rates and regulatory compliance, please contact us

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