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From 1 January 2025, intentionally underpaying employees could become a criminal offence, the Fair Work Ombudsman (FWO) has reminded small businesses.The new voluntary small business wage compliance code aims to ensure SMEs pay employees correctly. The FWO clarified that underpayment due to “honest” mistakes won’t be considered a criminal offence, but deliberate breaches could lead to serious consequences.
“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. These factors aren’t new to compliant employers, instead they’re steps many already take as part of good business practice,” the FWO said.
“Even if an employer has complied with the Code, civil actions such as issuing a compliance notice or an enforceable undertaking may still be taken and civil penalties may still apply.”
The code and supporting guide are available to download here: https://www.fairwork.gov.au/about-us/compliance-and-enforcement/criminal-prosecution/voluntary-small-business-wage-compliance-code
SMEs can also use the Fair Work Ombudsman’s pay calculator to check pay rates: https://calculate.fairwork.gov.au/.
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