By Amanda Curatore

Employee underpayments and wage theft is a growing issue in Australia – this has been recognised as a priority for the Fair Work Ombudsman during 2020-2021, and recently, the Australian Parliament hinted that federal wage theft laws will shortly be introduced, however, this is yet to be tabled in Parliament.

Nonetheless, some states have taken it upon themselves to introduce state-based legislation, criminalising wage theft. In this article, I point out which states have taken action to criminalise wage theft, and what businesses need to do to ensure they stay on the right side of the law.


Victoria was the first state to criminalise wage theft through the introduction of wage theft laws in June 2020. It is anticipated that the laws will come into effect on 1 July 2021.

The new wage theft laws create three primary offences each of which attracts penalties of up to $991,320 for body corporates or up to 10 years imprisonment and include:

  1. dishonestly withholding employee entitlements or expressly or impliedly authorising or permitting another person to do so;
  2. falsification of employee entitlement records to dishonestly obtain a financial or to prevent the exposure of a financial advantage having been obtained; and
  3. failure to keep an employee entitlement record to dishonestly obtain a financial advantage or to prevent exposure of a financial advantage having been obtained.


Following suit, on 9 September 2020, Queensland became the second state to introduce wage theft laws.  The date of commencement of the Criminal Code and Other Legislation (Wage Theft) Amendment Bill 2020 (Bill) (the Act) is yet to be fixed.

The Act explicitly includes wage theft as a criminal offence, amending the definition of stealing in the Criminal Code to include failures to pay an employee in relation to the “performance of work by an amount payable under legislation, an industrial instrument or agreement”.

Employers found to have contravened the Act are liable for up to 10 years imprisonment. The Act is intended to capture a broad range of payments such as:

  1. unpaid or underpayment of hours of work;
  2. unpaid penalty rates;
  3. unreasonable deductions;
  4. unpaid superannuation;
  5. withholding of entitlements;
  6. underpayment through intentionally misclassifying a worker including via a wrong award, wrong classification or by ‘sham contracting’ and the misuse of Australian Business Numbers; and
  7. authorised deductions that have not been applied as agreed.

What do businesses need to do?

Employers must ensure that their payroll systems are up to date with payment obligations under the correct modern awards. In addition, it is imperative that regular ‘health checks’ be conducted across your business to ensure that you are compliant with all legal obligations. This is why the HR Assured audit process, is a fantastic way to assist business owners in identifying and correcting compliance concerns before such issues are raised externally. In addition to a thorough HR audit, business owners should undertake their own compliance reviews and implement governance structures to prevent and identify underpayments.

It’s rare that a business would intentionally underpay its staff – often human error comes into play – but, in the view of the FWO, this still is not an excuse. You need to ensure your business is paying your staff entitlements correctly, no matter what. With HR Assured, you’ll have peace of mind knowing that your business is on the right side of the law.

Contact us today to discuss how we can support your business.

Amanda Curatore is a qualified Senior Workplace Relations Consultant at FCB Group and HR Assured. Amanda is highly experienced in providing workplace relations advice and assistance to clients in a wide range of matters including employment contracts, modern award interpretation, managing performance, bullying and harassment, terminations and managing risk