The New Commonwealth Wage Theft Laws | A Turning Point for Fair Pay in Australia

For years, wage theft has been a dark undercurrent in Australia’s employment landscape — headlines about underpaid workers and corporate missteps have become all too familiar. But a major shift has arrived.

As of 1 January 2025, the Australian Government has officially criminalised deliberate wage theft under the Fair Work Act (Cth) — sending a clear message: if you intentionally underpay your staff, you could go to jail.

What’s changing?

The Commonwealth reforms make deliberate and dishonest underpayment of wages a criminal offence. This means that if an employer knowingly pays workers less than their legal entitlements, and does so with dishonest intent, it’s no longer just a civil breach — it’s a crime.

Penalties are severe. Individuals could face up to 10 years in prison, and companies could be fined millions of dollars. These are the strongest national wage theft penalties Australia has ever seen.

Wage Theft Laws

Why it matters

Until now, most wage underpayments — even large ones — were dealt with through civil penalties and Fair Work Ombudsman enforcement. But critics argued that some employers treated fines as a “cost of doing business.”

The new criminal framework changes that. It adds a moral and legal weight to wage compliance, making it impossible to ignore payroll obligations. It also protects honest employers who do the right thing, by ensuring competitors don’t gain an unfair edge through exploitation.

Protecting workers and honest businesses

The government’s goal isn’t to punish mistakes — the focus is on intentional misconduct. Employers who make genuine payroll errors and take prompt steps to fix them are not at risk of prosecution.

Instead, the laws target those who deliberately falsify records, manipulate systems, or repeatedly ignore wage obligations.

What employers should do now

If you’re an employer, this is the time to review your payroll practices:

• Conduct a wage audit and verify award compliance.

• Fix any errors immediately and document remediation efforts.

• Maintain clear and accurate records of hours, pay rates, and entitlements.

• Seek professional advice when interpreting awards or enterprise agreements.

The bottom line

The Commonwealth’s wage theft law reforms represent a cultural turning point for Australian workplaces — fairness and accountability are no longer optional.

Employers who do the right thing have nothing to fear. Those who don’t may soon find that underpayment comes with a very high price.