Reminder: From 1 January 2025 intentional underpayment of wages is a criminal offence

The Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Closing Loopholes Act) introduced several changes to workplace laws, with changes coming into effect in a staggered fashion throughout 2023 to 2025.

While most of these changes have come into effect, members are reminded that the intentional underpayment of wages by employers will become a criminal offence from 1 January 2025.

Employers will commit an offence if:

1. They are required to pay an amount to an employee, or on behalf of an employee for their benefit, that is required by the Fair Work Act 2009; and
2. The employer intentionally fails to pay those amounts to or on behalf of the employee.

There are certain exceptions and these laws will not apply to employers who unintentionally underpay their employees or pay incorrect amounts by mistake.

If an employer is found to be guilty of intentional underpayments, the employer may face penalties of 3 times the amount of the underpayments and $7.825 million.

If you have any questions relating to your responsibilities regarding payment of wages, please contact our Workplace Relations and Legal Team on 02 6175 5900.