According to The Australian, wage underpayment has become a criminal offence – here’s what every employer needs to understand to stay compliant and out of trouble.
You might want to sit down for this one.
As of 1 January 2025, underpaying your employees isn’t just a bookkeeping error or a slap-on-the-wrist situation any more – it’s a crime. That’s right: wage underpayment is now officially classified as criminal conduct under Australian law.
For small business owners, this change adds a whole new layer to financial risk management. If you’re not completely across the latest payroll obligations, it’s time to sit up and pay attention. That’s where Hills Accountants in Hobart can help – more on that shortly.
Why the change?
This move is part of a broader crackdown on what’s commonly called “wage theft” – where businesses fail to pay staff correctly. It might be deliberate (which is rare) or accidental (much more common), but either way, the consequences have just stepped up a notch.
Previously, underpayments were treated as civil breaches. Now, for deliberate or repeated underpayments, there’s the potential for criminal charges, fines, and even jail time.
What counts as underpayment?
It’s not just about forgetting to hand over someone’s last pay cheque. Underpayment includes:
- Paying less than the minimum wage or Award rate
- Ignoring overtime, penalty rates, or allowances
- Failing to meet superannuation obligations
- Not issuing correct payslips or keeping accurate records
And yes – even if the mistake was unintentional, the responsibility still lands with you.
How to stay on the safe side
Start by reviewing your payroll systems and employment contracts.
📅 Are they up to date?
✅ Are Award conditions being followed?
🤔 Are you 100% confident your super and PAYG are spot-on?
If you’re not sure, now’s the time to find out – before a staff member or auditor does it for you.
When in doubt, call your accountant
That’s where we come in. Hills Accountants in Hobart have helped hundreds of businesses avoid costly compliance issues – including wage underpayment – by making sure their systems are rock solid.
Remember, this article is general in nature and doesn’t take into account your specific objectives, financial situation, or needs. For advice tailored to your circumstances, have a chat with us at Hills Accounting Hobart.
Talk to Kathy and the team today and stay ahead with Hills Insights.
Call Now! 03 6273 7800, or email admin@hillsaccounting.com.au.
From setting up proper payroll processes to advising on financial risk management, we’re here to help you pay your people properly and protect your business from legal fallout.
Because let’s face it – explaining a payroll mistake to an employee is one thing. Explaining it to a magistrate? Not so fun.
Remember, this article is general in nature and doesn’t take into account your specific objectives, financial situation, or needs. For advice tailored to your circumstances, have a chat with us at Hills Accounting Hobart.
Talk to Kathy and the team today and stay ahead with Hills Insights.
Call Now! 03 6273 7800, or email admin@hillsaccounting.com.au.