Have you ever looked at your payslip and thought something isn’t right? Maybe your hourly rate seems too low, you’re not paid for overtime, or your superannuation hasn’t been deposited. If these are not honest mistakes, they could be a form of wage theft.
Wage Theft Laws in Australia
Australian law now takes a serious stance on wage theft. From 1 January 2025, intentionally underpaying an employee’s wages or entitlements becomes a criminal offence under the Fair Work Act (Cth) 2009. Employers can face criminal penalties if they deliberately underpay staff.
These laws complement existing legislation in some states, such as Queensland and Victoria, which already criminalise deliberate wage underpayment.
What is ‘Wage Theft’ and What Are the Red Flags?
Wage theft occurs when an employer deliberately underpays an employee’s correct wages and entitlements. Honest mistakes, like payroll errors or misunderstandings of awards or agreements, do not count.
Wage theft can include:
- Paying less than the legal minimum wage: The Fair Work Act mandates a national minimum wage, reviewed annually by the Fair Work Commission. This ensures all employees earn a fair wage for their work.
- Not paying for all hours worked: This includes unpaid ‘trial shifts’ or asking employees to work off the clock.
- Not following modern awards or enterprise agreements: Modern awards set minimum pay and conditions for specific industries. Enterprise agreements set tailored conditions for workplaces. Deliberately failing to pay penalty rates for evenings, weekends, public holidays, overtime, or allowances can be wage theft.
- Underpaying or not paying superannuation: Employers must pay a percentage of earnings into a superannuation fund under the Superannuation Guarantee (Administration) Act 1992 (Cth).
- Incorrectly classifying a worker: Calling a permanent worker a ‘casual’ or placing them in a lower pay bracket than their role requires.
Taking Action
If you suspect wage theft, approach the situation calmly and methodically. Follow these steps:
Step 1: Check Your Entitlements
First, confirm that you have been underpaid. Use the Fair Work Ombudsman’s Pay and Conditions Tool to check your correct pay, including penalty rates or allowances for your industry award. This gives a clear picture of what you should have been paid.
Step 2: Gather Evidence
Collect evidence to support your case. Useful resources include:
- Payslips: Check if hours and pay rates are correct.
- Bank statements: These show exactly what you were paid.
- Your own records: Keep a diary or app to log hours, overtime, breaks, and tasks performed. Use it as a timesheet if the employer’s records are incomplete.
Step 3: Talk to Your Employer
Sometimes underpayments are honest mistakes. Arrange a private meeting with your employer or manager. Present your findings calmly and factually. Write down what was discussed and any agreement reached. Union members can bring a representative.
Step 4: Contact the Fair Work Ombudsman
If speaking to your employer fails or you are uncomfortable, make a formal complaint to the Fair Work Ombudsman (FWO). The FWO can:
- Investigate your complaint
- Contact your employer on your behalf
- Mediate a resolution
- Take legal action in serious cases to recover unpaid wages and seek penalties
You can also submit an anonymous tip-off to the FWO if you are not ready to make a formal complaint.
Step 5: Consider Legal Action
If other steps fail, you may take legal action to recover unpaid wages, often through the Federal Circuit and Family Court of Australia. The court process can be complex, but small claims procedures exist for amounts under $20,000 to make it more accessible. A lawyer can help you understand options, represent you, and improve your chances of recovering what you are owed.
Conclusion
From 1 January 2025, deliberately underpaying employees is a criminal offence across Australia. Victims of wage theft have resources and legal pathways to recover their money.
If you or someone you know needs help or advice, call (03) 9600 2768 or email [email protected].