Wage theft is no longer just a compliance issue – it’s now a criminal offence in Australia. With stricter laws introduced from 1 January 2025, every employer must understand what wage theft is, how it occurs, and the severe consequences that follow. This blog helps you stay informed and introduces a free webinar hosted by Sentrient to support your compliance journey.
The Australian business landscape has changed dramatically with these new regulations. For HR managers, payroll teams, and business owners, staying on top of these changes isn’t just good practice, it’s essential for avoiding potentially devastating penalties and reputational damage.
Let’s explore what wage theft means in 2025, why it matters to your organisation, and how Sentrient’s upcoming free webinar can help you navigate these complex waters with confidence.
What is Wage Theft in Australia?
Wage theft refers to the deliberate underpayment or non-payment of employee entitlements. It includes failure to pay correct wages, superannuation, penalty rates, or misclassifying employees to avoid legal obligations.
These breaches can now lead to criminal charges, especially under the new laws introduced in 2025, making it essential for all Australian businesses to understand their obligations.
The Fair Work Ombudsman defines wage theft as occurring when employers deliberately deny employees their lawful workplace entitlements. It’s a serious offence that affects thousands of workers across Australia each year.
Common Examples of Wage Theft
- Not paying minimum wage or overtime
- Unpaid work trials or training
- Withholding superannuation
- Misclassifying full-time employees as independent contractors
- Failure to provide entitlements such as leave or breaks
- Unauthorised or excessive wage deductions
- Not providing payslips or maintaining proper records
- Paying “cash in hand” to avoid tax and superannuation obligations
These practices might seem minor in isolation, but they constitute serious breaches of Australia’s workplace laws and can lead to significant legal repercussions.
Why Does Wage Theft Matter to Employers?
Wage theft is more than an employee issue, it puts your business at serious legal, reputational, and financial risk. In 2025, the Australian Government took a firm stance, holding businesses accountable for fair pay practices.
Small businesses, franchise operators, and employers of casual or young workers are especially under scrutiny by the Fair Work Ombudsman and regulatory authorities.
The consequences extend beyond fines and penalties. Employee morale, productivity, and retention all suffer when workers believe they’re being unfairly treated. The cost of replacing staff and rebuilding trust far outweighs the short-term financial gain of underpayment.
Recent high-profile cases have shown how wage theft allegations can dominate headlines for months, causing lasting damage to brand reputation and customer loyalty. In today’s socially conscious marketplace, ethical employment practices are increasingly scrutinised by consumers and business partners alike.
How Does Wage Theft Happen in the Workplace?
Understanding how wage theft occurs can help prevent accidental or systemic breaches in your organisation’s payroll and HR practices.
| Type of Wage Theft | How It Happens | Common Risk Areas |
|---|---|---|
| Underpayment of wages | Paying less than award or agreement standards | Casual workers, juniors, apprentices |
| Unpaid superannuation | Failing to meet the required contribution percentage | Cash payments, contractor misclassification |
| Unrecorded overtime | Not tracking and paying for hours beyond agreed schedules | Salaried employees, poor time tracking |
| Misclassification | Incorrectly hiring workers as contractors | Gig economy roles, specialised services |
| Withholding entitlements | Not giving sick leave, holiday pay, or breaks | Part-time workers, high-turnover industries |
These issues often arise from outdated payroll systems, inadequate knowledge of award requirements, or poor record-keeping practices. Sometimes they’re deliberate attempts to cut costs, but frequently they result from administrative oversight or misunderstanding of obligations.
Many businesses don’t realise they’re non-compliant until they face an audit or employee complaint. By then, back-payments, penalties, and legal costs can accumulate to crippling amounts, especially for small to medium enterprises.
What Has Changed in 2025? New Wage Theft Laws Explained
From 1 January 2025, intentional underpayment of wages and entitlements became a criminal offence across Australia, fundamentally changing the compliance landscape.
The Fair Work Legislation Amendment (Closing Loopholes) Act 2023 was passed to tackle wage theft more aggressively. This law applies to most businesses operating in Australia, regardless of size or sector with some exceptions.
This legislation follows Victoria and Queensland’s earlier moves to criminalise wage theft, creating a unified national approach to addressing deliberate underpayment practices.
Key Highlights of the 2025 Wage Theft Laws
- Intentional wage theft is now a criminal offence
- Up to 10 years imprisonment for individuals found guilty
- Corporations can be fined up to $8 million or three times the underpayment, whichever is greater
- Expanded small claims jurisdiction for workers
- Enhanced role of the Fair Work Ombudsman in enforcement
- New protections for whistleblowers reporting wage theft
- Increased funding for regulatory oversight and investigation
- Expanded powers for workplace inspectors to examine records
The legislation differentiates between honest mistakes and deliberate underpayment, but the burden of proof is on employers to demonstrate their compliance efforts and good faith attempts to meet obligations.
What Are the Legal Consequences of Wage Theft in Australia?
Failing to comply with wage laws can lead to devastating outcomes for both businesses and the individuals responsible for payroll decisions.
For Businesses
- Criminal prosecution and court proceedings
- Corporate fines of approximately $8 million
- Civil penalties and compensation orders
- Compulsory audits and compliance programs
- Brand and reputational damage
- Loss of customer and employee trust
- Difficulty attracting and retaining talent
For Individuals
- Criminal convictions for company directors and officers
- Potential jail terms of up to 10 years
- Personal fines and penalties
- Disqualification from managing corporations
- Professional reputation damage
- Career-limiting public records of involvement
These consequences reflect the government’s determination to change workplace culture around fair payment practices and ensure all workers receive their lawful entitlements.
How Can Employers Prevent Wage Theft?
Employers need to act proactively to protect their business and employees. Here’s how you can safeguard your organisation against unintentional wage theft:
Best Practices to Avoid Wage Theft
- Conduct regular independent pay audits
- Ensure correct classification of employees under appropriate awards
- Stay updated on modern awards and enterprise agreements
- Implement robust time and attendance systems
- Keep accurate and compliant wage records for at least seven years
- Provide specialised training for payroll, HR, and management staff
- Use compliance software to track obligations and changes
- Create clear employment contracts that specify entitlements
- Establish reporting channels for payment concerns
- Respond promptly to any employee queries about pay
Sentrient’s HR and compliance solutions can help automate these practices for ongoing assurance, making it easier to maintain compliance with Australia’s wage theft legislation.
Our award interpretation tools help you understand exactly what you should be paying each employee, while our compliance management system tracks regulatory changes and alerts you when action is needed.
Join Our Free Webinar: Understanding Wage Theft Laws in Australia
Sentrient is hosting a free webinar to help employers stay ahead of compliance obligations under the new wage theft laws and protect your business from potential violations.
Why You Should Attend
This webinar will cover critical information including:
- Understanding criminal liabilities and how they apply to different roles
- Learning how to recognise, prevent and address potential violations
- Staying updated on Fair Work Ombudsman enforcement powers and priorities
- Discovering practical technological solutions to avoid non-compliance
- Hearing real case studies of recent prosecutions and their outcomes
- Getting actionable steps to implement in your business immediately
Webinar Details
Topic: Wage Theft in Australia: Laws and Employer Responsibilities
Dates: Tuesday 17th June 2025 & Thursday 19th June 2025
Cost: FREE
Location: Online (Registration Required)
Limited spots available, so make sure to register now to secure your place in this essential session for Australian employers.
About the Presenter
Kirra Griffin, Lawyer at Mills Oakley, will lead the webinar. With over 15 years of experience in workplace law and safety, Kirra offers valuable legal insights to help your business navigate the evolving wage landscape.
Kirra regularly advises businesses on compliance issues and has helped numerous organisations implement effective systems to prevent wage theft before it occurs.
Conclusion: Secure Your Business – Attend the Free Webinar
The wage theft laws in Australia are now stricter than ever. Avoiding wage theft is not just a legal requirement – it’s part of building a trustworthy and fair workplace culture that benefits both your business and employees.
With potential criminal penalties, massive fines, and reputational damage on the line, every Australian employer needs to prioritise compliance with wage laws.
Register now for Sentrient’s free webinar and equip your business with the knowledge and tools to stay compliant in this challenging regulatory environment. Don’t leave your business vulnerable to the severe consequences of unintentional wage theft.
FAQs
1. What is considered wage theft in Australia?
Wage theft includes intentional underpayment of wages, unpaid superannuation, failure to pay penalty rates, or misclassifying workers to avoid legal obligations.
2. When did the wage theft laws in Australia change?
From 1 January 2025, intentional wage theft became a criminal offence in Australia, under the Closing Loopholes Amendment Act.
3. Who is liable for wage theft?
Employers, business owners, HR, payroll teams, and executives can all be held liable if wage theft is proven within the organisation.
4. What are the penalties for wage theft?
Individuals can face up to 10 years in jail. Corporations may be fined approximately $8 million or three times the underpayment – whichever is greater.
5. How can I prevent wage theft in my business?
Implement robust HR systems, conduct regular pay audits, use compliance software like Sentrient’s solutions, and ensure your payroll team is properly trained.
6. Does wage theft have to be intentional to be punished?
Criminal penalties apply to intentional wage theft, but unintentional underpayment can still result in significant civil penalties and back-payment obligations.
7. How can I register for the free wage theft webinar?
Visit the Sentrient website and navigate to the Wage Theft Webinar registration page. Choose your preferred date and secure your spot.
8. How can Sentrient help with wage compliance?
Sentrient’s HR and compliance software includes award interpretation, regulatory updates, and compliance tracking tools that help businesses avoid wage theft issues.
