Underpayment and wage theft

Underpayment means being paid less than what you are entitled to. Depending on where you work, this can mean being paid less than you are entitled to under the relevant Award or agreement, or less than the national minimum wage.

Deliberate underpayment is known as wage theft.

Underpayment and wage theft are rife across Australian workplaces: research has found that two-thirds of workers in Australia are not receiving their full salary and workers are losing up to $1.35 billion dollars to wage theft every year.

Underpayment and wage theft can take many forms, including the following: 

• Failing to pay superannuation
• Failing to pay breaks and overtime 
• Not paying for trial or training periods 
• Not paying personal, annual or other forms of paid leave entitlements 
• Misclassifying workers as independent contractors 
• Not paying personal, annual or paid leave 
• Not paying you the right rate for acting up in a higher grade.

Deliberate wage theft is now a criminal offence

Wage theft was previously only a criminal offence in some states in Australia.

But union members won new laws to prevent wage theft as part of the Closing Loopholes Act. The changes mean that, from 1 Jan 2025, wage theft will become a criminal offence at the Commonwealth level.

The new laws are designed to target deliberate wage theft by non-small business employers, and there will be serious consequences for employers who do the wrong thing and short-change their workers.

The maximum civil penalty for wage theft will also increase to:

• For organisations: a fine of $7.825 million dollars or 3 times the amount of the underpayment, whichever is greater
• For individuals: a fine of $1.565 million dollars or 3 times the amount of the underpayment, whichever is greater and a maximum of 10 years in prison

The Fair Work Ombudsman will be empowered to investigate suspected underpayment offences and issue compliance notices to employers requiring them to: 

• calculate the underpayment amount owed to an employee 
• pay the amount owed to the employee

What can I do if I’m being underpaid?

Find out how much you should be getting paid – including su­perannuation, penalty rates and other entitlements – and compare it to how much you are actually being paid by reading your payslip.

Chat to your workmates to work out if they have similar concerns (this is now allowed thanks to union-won pay secrecy laws!). It’s likely that if you’re worried about your pay not being right, you won’t be the only one.

If you think that you, and/or others are not being paid correctly, raise it with your employer and get in touch with your delegate or your union: thanks to union-won changes in the Closing Loopholes (No.2) Act, from 1 July 2024, a union representative can get an exemption certificate from the FWC to waive the minimum 24 hours’ notice requirement for entry (that they normally have to give the employer) if they reasonably suspect a member of the union has been or is being underpaid.