Starting 1 January 2025, new criminal underpayment laws have come into effect. Small business employers (those with fewer than 15 employees) can rest assured that genuine mistakes in wage payments will not lead to prosecution if they comply with the Fair Work Ombudsman’s Voluntary Small Business Wage Compliance Code.
The Code is designed to help small businesses confidently meet their obligations under workplace laws while protecting them from criminal liability. It includes clear steps to ensure employees are paid correctly and provides practical tools, a checklist, and examples of best practices.
Fair Work Ombudsman Anna Booth stated, “Employers who work diligently to do the right thing by their employees need not worry. The offence applies only to intentional underpayments. Compliance with the Voluntary Code means we cannot refer a small business for possible prosecution.”
Key actions under the Code include:
- Making reasonable efforts to determine correct pay rates and entitlements.
- Relying on accurate information about employee roles, qualifications, and classifications.
- Seeking advice from reliable sources, such as the Fair Work Ombudsman, professional consultants, or industry associations.
- Proactively addressing underpayments through audits, back-payments, and system improvements.
By following the Code, small business employers demonstrate their commitment to fair treatment of employees and reduce the risk of non-compliance.
For more details, visit the Fair Work Ombudsman’s website.
