As of 1 January 2025, intentional underpayment of workers’ wages is a criminal offence in Australia. However, even if the underpayment is not intentional giving rise to possible criminal liability, the employer can still be liable for civil penalties that are extremely significant and can cripple a business.
The penalties now applicable to wage theft and wage underpayment claims are as follows:
Wage Theft
- For Companies – the greater of three times the amount of the underpayment (if it can be established) or $8.25 million
- For individuals – a maximum of 10 years in prison, and/or three times the amount of the underpayment (if it can be established) or $1.65million
Civil Penalties
- For small business employers (companies with less than 15 employees), the maximum penalty is $990,000 per serious contravention
- For non-small business employers (companies with 15 or more employees), the maximum penalty is the greater of $4,950,000 or 3 times the underpayment amount per serious contravention
- There are also significant fines for individuals involved in a contravention.
This document provides further important information on wage audits, including what they are and how they can help your business.