With the new year comes a significant shift in Australian employment law. From January 1 2025, it’s now an offence to intentionally underpay employee wages and entitlements – and doing so can result in criminal charges.
The risks are high for small businesses, but RecruitWest.offers a range of services that can help make sure you remain compliant.
Unpacking the law
Under the new laws, the Fair Work Ombudsman (FWO) has the authority to investigate suspected underpayment offences and refer cases for criminal prosecution. Penalties for those convicted include hefty fines, prison time, or both.
But it’s not all about penalties. These changes also signal a push towards building a culture of compliance and accountability. For your business, this is an opportunity to review payroll practices, improve processes, and ensure your workers receive their due.
Voluntary Small Business Wage Compliance Code
It’s good news for employees, but there are also protections designed to help SMEs navigate these changes and stay compliant, with the introduction of the Voluntary Small Business Wage Compliance Code (Code). If your business follows the Code and demonstrates good faith efforts to rectify underpayment issues, the FWO actually cannot refer your case for criminal prosecution.
The Code includes practical advice, checklists, examples, and best practices to guide small businesses. It’s a helpful tool, but applying it can be daunting, especially for employers juggling multiple responsibilities. That’s where we can help.
Our HR consultancy services include thorough HR audits to ensure your business pays employees correctly according to the relevant Award rates. We’ll help you align with the Code, avoid costly mistakes, and create a fair, compliant workplace culture.
Cooperation agreements: a safety net
If you discover an underpayment in your business, don’t panic. The new laws give you a pathway to work cooperatively with the FWO. A cooperation agreement allows businesses to self-report potential breaches and outline steps for rectification. As with the Code, while the agreement is in force, your business case won’t move to criminal prosecution.
This collaborative approach encourages businesses to address issues proactively.
Why these changes matter
These new laws aren’t just about compliance – they’re about protecting your people, reputation, and bottom line. Businesses found guilty of criminal underpayment risk:
- Hefty fines that could cripple your finances.
- Damaged reputation, leading to loss of trust from employees, customers, and partners.
- Legal complications, including prison time for deliberate offenders.
Even unintentional errors can lead to significant stress and financial strain. With the complexity of Awards and pay structures, mistakes can happen. But they don’t have to.
How RecruitWest can help
At RecruitWest.we understand that navigating Australia’s increasingly complex employment laws can feel overwhelming. Our range of services is designed to keep your business on track:
- Payroll services: From setup to ongoing management, we’ll ensure your payroll processes are accurate, compliant, and stress-free.
- Outsourcing HR: Let us take care of all your HR obligations as an in-house department would. We can also audit your payroll and HR systems, ensuring compliance with Award rates and other legal obligations.
- Compliance support: We provide expert guidance on implementing the Voluntary Small Business Wage Compliance Code and preparing cooperation agreements.
- Tailored advice: Every business is different. As experts in the mining, construction and logistics sectors, our tailored solutions align with your specific industry, workforce, and challenges.
What you can do now
Proactive compliance is the best way to protect your business. Here’s how to start:
- Double-check your payroll: Ensure employees are paid accurately and on time. Or outsource your payroll services to Recruit
- Understand the Code: Download and review the Voluntary Small Business Wage Compliance Code and supporting guide.
- Seek expert support: Partner with Recruit to streamline your compliance efforts and safeguard your business.
The new criminal underpayment laws are a wake-up call for all employers to prioritise fair pay and compliance. With RecruitWest., you can focus on growing your business, knowing your payroll and HR processes are in expert hands.