Wage theft

What changed in 2025?

The Closing Loopholes reforms made intentional underpayment of wages and certain entitlements a criminal offence from 1 January 2025, with company penalties of up to the greater of three times the underpayment or a fixed maximum fine, and imprisonment available for individuals in the worst cases. Criminal liability sits on top of the civil regime, which continues to apply to underpayments of any kind, deliberate or not.

Is an honest mistake wage theft?

No. The criminal offence requires intent; a payroll error is not a crime. But accidental underpayment still carries civil exposure, back-payment obligations and reputational cost, and "we didn't know" wears thin quickly when the cause is a payroll system nobody has audited against the award. Small businesses that follow the Voluntary Small Business Wage Compliance Code cannot be referred for criminal prosecution for unintentional underpayments.

Where do underpayments usually come from?

Rarely from someone deciding to underpay. The usual sources are structural: employees classified at the wrong award level, casual loading or penalty rates missed for irregular hours, annualised salaries that no longer cover the hours actually worked, and superannuation paid late. That is why underpayment keeps surfacing at large, well-resourced organisations; the failure is in systems and review discipline, not intent.