By My CPE Pty Ltd | August 2025
Intentional wage theft is no longer a minor breach of industrial relations; it is a serious offence that may result in fines, imprisonment, or both. It is a considerable compliance issue with criminal consequences, for both employers and those who knowingly assist or facilitate the misconduct.
Recent federal legislative reforms follow in the path of Queensland and Victoria, and they sent a very clear message: Intentional wage theft will not be tolerated, and the Fair Work Ombudsman is tasked with investigating suspected criminal underpayment offences and have a responsibility to refer matters to the Commonwealth Director of Public Prosecutions or the Australian Federal Police for consideration and possible criminal prosecution.
What is Wage Theft?
“Intentional Wage Theft” refers to the deliberate underpayment of wages or entitlements owed to an employee under workplace laws. This can include:
- Unpaid overtime
- Failure to pay minimum award rates
- Non-payment of superannuation or salary sacrifice amounts
- Unlawful deductions
- Failure to pay entitlements such as leave, penalty rates, or loadings
- Requiring employees to perform unpaid work
- Something has been intentionally done that results in wage related amounts not being paid on or before the due date.
The Legal Consequences for Employers
Companies and individuals can now face massive criminal penalties:
✓ Up to 10 years imprisonment for individuals
✓ Fines up to 3 times the amount of the underpayment, or up to a maximum of:
✓ $1.65 million for individuals
✓ $8.25 million for corporations.
The Fair Work Ombudsman may pursue enforcement through the courts under the Fair Work Act 2009 (Cth), especially for serious contraventions or repeat breaches. State and territory laws may also apply.
The Role of Payroll Professionals
Payroll professionals are trusted advisors and the custodians of wage compliance. Errors, even if unintended can have far-reaching consequences. However, when a payroll officer, HR advisor, or bookkeeper knowingly participates in wage theft, they may also be held accountable under the accessorial liability provisions.
Section 550 of the Fair Work Act 2009 allows the courts to impose penalties not just on employers, but on any person “involved in” the contravention. This includes:
- Advisers who encourage or authorise non-compliance
- Individuals who assist in covering up wage theft
- Bookkeepers or payroll staff who turn a blind eye to systemic underpayment
Accessorial Liability: A Real and Present Risk
In recent years, there has been a sharp increase in cases where individuals, including directors, HR managers, and payroll officers have been found personally liable for wage breaches. Courts have emphasised that “I did not know” is not a defence when the person had reasonable grounds to be aware of the issue.
Accessorial liability can lead to:
- Personal financial penalties
- Reputational damage
- Disqualification from managing corporations
- Involvement in criminal investigations in states where wage theft is an offence.
Prevention is the Best Defence
Employers and payroll professionals must take proactive steps to ensure compliance. This could include:
- Conducting regular payroll audits
- Award and agreement interpretation training
- Staying updated on Fair Work and state legislation changes
- Using compliant payroll systems and seeking expert advice when needed.
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It’s important to note, that there are exceptions embedded in the legislation.
Refer to: Criminalising wage underpayments and other issues
Final Word
At My CPE Pty Ltd, we believe that education is the key to prevention. Wage theft, whether intentional or accidental can destroy businesses, careers, and livelihoods. Payroll professionals are in a unique position to prevent it. Do not let a lack of knowledge leave you exposed. Stay informed. Stay compliant.
My CPE Pty Ltd — Your Partner in Payroll and Professional Education.