Did you know that from 1 January 2025, intentionally underpaying an employee’s wages or entitlements can be a criminal offence? This doesn’t include honest mistakes.
The Voluntary Small Business Wage Compliance Code Declaration 2024 (the Code) came into effect at the beginning of the year, alongside Australia’s new federal wage theft laws.
The Code provides small businesses (those with fewer than 15 employees) with a framework to avoid prosecution for underpayments that occur unintentionally. It highlights the critical need for small businesses to take a proactive approach to wage compliance.
While participation in the code is voluntary, non-compliance with wage laws, including adherence to industry awards, carries significant risks.
The Fair Work Ombudsman has the authority to impose substantive civil penalties for breaches whether known or unknown – including hefty fines, back-pay orders, possible imprisonment, and reputational damage.
To safeguard your business, it’s essential to:
regularly review payroll systems,
ensure all wages and entitlements align with industry awards and legal standards, and
maintain accurate, up-to-date records.
Proactively addressing compliance not only minimises the risk of penalties but also strengthens trust with your employees and demonstrates your commitment to fair and lawful practices.
Don’t wait for an issue to arise—take action now to ensure your business is fully compliant. If you need guidance Chamber member, Mark Lipkin from The Airlie Group, offers members 1-hour free consultations on industrial relations. Contact Mark today at mark@airliegroup.com.au
For more information, see the Fair Work Ombudsman’s website: https://www.fairwork.gov.au/about-us/compliance-and-enforcement/criminal-prosecution/voluntary-small-business-wage-compliance-code
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