Wage theft is deliberate underpayment of employee entitlements, now a criminal offence under federal law.
Legislation: Fair Work Act 2009; State Criminal Legislation | Category: Wages & Payment
What is Wage Theft?
Wage theft refers to the deliberate or intentional underpayment of employee entitlements. Following widespread underpayment scandals, wage theft has been criminalised at both federal and state levels. From 1 January 2025, intentional underpayment is a criminal offence under the Fair Work Act with penalties including imprisonment of up to 10 years for individuals and fines of up to $7.8 million for companies.
The criminal offence requires intent — negligent or accidental underpayment remains a civil matter with civil penalties. Queensland and Victoria have had state wage theft criminal offences since 2020-2021. The federal regime provides a “safe harbour” for employers who cooperate with the Fair Work Ombudsman.
Key Compliance Points for Employers
- Intentional underpayment is now a criminal offence with serious penalties
- The FWO has a Voluntary Small Business Wage Compliance Code providing guidance
- Employers who voluntarily disclose and cooperate may access “safe harbour” protections
- Proactive compliance, self-auditing, and rectification are critical risk mitigation strategies
- Directors and managers involved in wage theft decisions may face personal prosecution
Frequently Asked Questions
What is Wage Theft?
Wage theft is deliberate underpayment of employee entitlements, now a criminal offence under federal law.
Why is Wage Theft important for employers?
Understanding wage theft helps employers comply with Australian employment law, avoid penalties, and maintain fair workplace practices.
