Closing Loopholes Act – Wage Theft Provisions
From 1 January 2025, intentional underpayments of wages by employers will be a criminal offence.
Employers may commit an offence if they owe money to an employee under the Fair Work Act or an industrial instrument (like an Award or an enterprise agreement), and intentionally engage in conduct that results in a failure to pay on or before the money is due. This can include failure to make required superannuation contributions.
A Voluntary Small Business Wage Compliance Code will be established before the changes take effect, and compliance with this Code means a small business won’t be prosecuted if they underpay their employees.
Companies prosecuted face penalties three-times the amount of the underpayment, if a court can determine it, or $7.825 million, whichever is greater. If the court can’t determine the underpayment, the maximum penalty is $7.825 million.
Individuals can be imprisoned for up to 10 years; be fined either three-times the amount of the underpayment, if the court can determine it, or up to $1.565 million, whichever is greater; or be both fined and imprisoned.