Wage Theft in Australia: Laws, Penalties & How toPrevent Underpayment
Introduction
Wage theft is now a national criminal offence in Australia.For HR, legal, and business leaders, that means wage compliance isn’t just a box to tick—it’s a legal and moral necessity.
What Is Wage Theft?
Wage theft refers to the underpayment of wages or ntitlements, whether deliberate or accidental. It includes:
- Paying below award or minimum wage
- Not paying overtime or penalty rates
- Withholding leave loading or allowances
- Unpaid superannuation
- Misclassifying employees
New Criminal Penalties (Effective 2025)
The new federal laws impose criminal penalties for intentional underpayment of wages and entitlements. The consequences include:
- Up to 10 years’ imprisonment for individuals
- Fines exceeding $7 million for companies
- Personal liability for directors and managers
For unintentional errors, civil penalties still apply—andthey're significant.
Wage Theft in the Headlines
Many major brands—across retail, hospitality, andeducation—have self-reported underpayments over the last five years. Oftenthese errors accumulated slowly and unknowingly. But now, ignorance is nolonger a defence.
How Wage Theft Happens
- Complex award interpretations
- Flat rate pay models
- Payroll system misconfigurations
- Misclassification of workers
- Poor record-keeping
How to Prevent Wage Theft
- Know the Awards – Identify which modern award applies to each role.
- Train Managers – Ensure those managing rosters understand pay obligations.
- Automate Timekeeping – Accurate clock-on/clock-off data reduces risk.
- Audit Regularly – Conduct internal or external wage audits.
- Fix Issues Promptly – Pay back staff and correct system settings.
Role of Legal and Compliance Teams
Wage audits conducted under legal professional privilege arebecoming common. They allow businesses to review risk areas confidentially,with lawyers advising on remediation strategies.
Why Use Subi?
Subi helps legal and HR teams prevent wage theft byautomating the wage audit process. It highlights underpayment risks early,giving companies time to fix issues before they escalate.
Final Thought
Wage theft enforcement is here to stay. Getting ahead of theissue with proactive auditing and support from platforms like Subi is the bestway to protect your people—and your business.