Are you across the new wage theft and underpayment laws?

Back to News
PayrollUpdates/News

New wage theft and underpayments laws will go into effect in January 2025 as part of the Fair Work Legislation Amendment Act 2023.

These new laws introduce the threat of significant sanctions for employers found guilty of underpaying staff, regardless of intention.

 

Wage theft

According to this legislation, wage theft is a new criminal charge that applies where there is an underpayment of wages, or an intent of underpayment. This is inclusive of all rightful payments to employees under the Fair Work Act 2009.

If found guilty of wage theft, employers may face up to 10 years’ imprisonment and up to 5,000 penalty units ($1.565 million) for individuals and 25,000 penalty units ($7.825m) for corporate entities.

This legislation drastically increases the consequences of underpaying employees, reinforcing the importance of good payroll practices for employers. Any failure to adhere award rates, enterprise agreements or penalties will place a business under serious risk.

 

Underpayments

Even where there is no evident intention for underpayment, employers can still be liable for significant financial penalties. There are many possible scenarios where employers, particularly within small entities, may unintentionally pay employees below their award rates.

It is highly recommended that business conduct thorough audits of their payroll systems and processes to ensure compliance with new legislation. Optima Partners can assist with assessing your payroll and financial records to ensure compliance.

Additionally, the Chamber of Commerce and Industry WA’s legal practice Business Law WA (BLWA) can assist with payroll audits and contract reviews. BLWA is offering a complimentary Employment Contracts and HR Document Review.

 

If you have any questions about underpayments, including where you have discovered an underpayment, please contact our team at BusinessLawWA@cciwa.com or (08) 9365 7746.

Optima Partners offers support to all businesses. Whatever your requirements

For more information on how Optima Partners’ services can help your business, contact the team at info@optimapartners.com.au for a consultation.

Latest News

Cash flow crunch: SIC, GIC and super guarantee increase
Small and medium businesses could be facing a cash flow crunch in the wake of...
Planning for EOFY 2024-25
With the end of the 2024-25 financial year in sight, the time has come again...
2025 Federal Election: Key tax changes under Labor’s second term
The Australian Labor Party has declared victory in the 2025 Federal Election, establishing a second...
Sustainability reporting: ASIC urges SMEs to brace for impact
The Australian Securities and Investments Commission (ASIC) has reminded small and medium entities to be...
Key Dates: May 2025
15 May: Lodge 2024 tax returns for all entities that did not need to lodge...
Understanding business structures: tax, liability and asset protection
Your chosen business structure has massive implications for your tax liability, asset protection and cost....
New GST reporting rules for small businesses
The Australian Taxation Office (ATO) recently announced that over 3,500 small businesses will be moved...
Optima Partners to host 4th annual Perth Car Club meet
Optima Partners is proud to host Perth Car Club’s fourth annual anniversary meet-up at our...
Key Dates: April 2025
21 April: Lodgement and payment of March 2025 monthly business activity statement 21 April:...
Selling your business: Best practices
Selling your business is a major decision and a milestone in your career. Whether you’re...