Wage theft laws effective 1 January 2025

The Closing Loopholes Act amended the FW Act to introduce a criminal offence for intentional underpayment of employees’ wages.

The offence commenced on 1 January 2025, following the declaration of the Voluntary Small Business Wage Compliance Code.

An employer will commit an offence if the employer intentionally engages in conduct that results in the underpayment of their employees. It will apply to employee entitlements under the FW Act or a fair work instrument, e.g., a modern award or enterprise agreement.

The wage theft offence will carry a maximum penalty of:

• for an individual: 10 years’ imprisonment, and/or a maximum fine of the greater of three times the amount of the underpayment
• for a body corporate: the greater of three times the amount of the underpayment, or 25,000 penalty units.

The Fair Work Ombudsman (FWO) will be primarily responsible for investigating the new criminal offence. The FWO will then refer matters to the Commonwealth Director of Public Prosecutions or the Australian Federal Police for consideration, and prosecution where appropriate.

Source: LexisNexis Australia 2025