Wage Theft – Small Business Code – Important changes have already come into effect!

Overview

From 1 January 2025, intentionally underpaying an employee’s wages or entitlements can be a criminal offence. The Fair Work Ombudsman can investigate suspected criminal underpayment offences and refer suitable matters for criminal prosecution. If a person is convicted of a criminal offence, a court can impose fines, prison time, or both.

Importantly, there are protections in place for small businesses to avoid criminal prosecution such as the Voluntary Small Business Wage Compliance Code (Code) and cooperation agreements - this is where HRAnywhere can help!

Code and Guide

Crucially, the Fair Work Ombudsman can’t refer a small business employer’s conduct for possible criminal prosecution if they are satisfied the Company has complied with the Code in relation to an underpayment - so how does an employer demonstrate that they have complied?

Check you’re paying employees correctly

A small business employer will comply with the Code if they don’t intend to underpay their employees. This will be assessed by looking at several factors such as

• steps the business took to check they are paying employees correctly;

• staying up to date with changes;

• steps taken to correct mistakes;

• promptly paying back workers; and

• taking steps to make sure it doesn't happen again