
Effective from January 1, 2025, employers who deliberately underpay their employees can now face criminal prosecution. Fair Work will not refer a small business employer’s conduct for possible criminal prosecution if it is satisfied that the employer complies with the Code and that an honest mistake has been made.
The new offence and civil penalties are part of several changes to workplace laws introduced under the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Cth) and Fair Work Legislation Amendment (Closing Loopholes) Act 2024 (Cth) respectively.
What is the Fair Work Voluntary Small Business Wage Compliance Code?
The Fair Work Ombudsman (FWO) introduced the Voluntary Small Business Wage Compliance Code to assist employers in understanding their obligations and reducing risk. While designed for small businesses (fewer than 15 employees), the Code provides valuable guidance for all employers.
What steps can I take to reduce the risk of being prosecuted for wage theft?
Free payroll software from e-PayDay helps ensure you meet the Fair Work Voluntary Small Business Wage Compliance Code. It's a smart and simple solution for protecting your business and supporting your employees.
As an employer, you can also take several simple steps to minimise non-compliance risk and potential penalties. Some of these measures you may have already in place.
Employers must adopt a proactive approach rather than a reactive response to ensure their employment compliance obligations are met.
Here are some recommended steps to consider:
Understand Fair Work pay and entitlements, ensuring employees are correctly paid under the Fair Work Act or an industrial instrument (such as an Award or Agreement). The Fair Work Ombudsman offers numerous tools and services for employers to assist in meeting compliance obligations.
Maintain detailed Employee payroll information that is easily accessible to the Fair Work Inspectors.
Maintain accurate Time and Attendance records.
Seek professional guidance from qualified sources.
Subscribe to resources that provide information and updates regarding Legislative changes, such as Industry Associations.
Promptly address underpayments immediately upon identification.
Using technology wherever possible to assist in meeting your compliance obligations.
Our automated Award-centric free payroll software resolves problems with the set, forget, and neglect mindset.
While technology and automation do not resolve all compliance issues, they serve as practical tools for mitigating risks. e-PayDay Go FREEPAY® has offered powerful functionality since 2022 to keep current with the correct hourly rates. Our award-focused automated payroll software effectively tackles the challenges of a "set it and forget it" approach, ensuring you stay engaged and responsive to your payroll compliance needs. The opportunity to neglect your responsibilities is minimised.
SET

When adding an employee, all available Modern Awards and Classifications are available in real-time, directly from Fair Work. The Fair Work P.A.C.T. (Payment and Conditions Tool) and Find My Award are also easily accessible within e-PayDay Go FREEPAY®. Once the appropriate Award is determined, choosing the Award and Classification from the provided list is simple. The Award Hourly rate is automatically prefilled and can be easily changed for situations where you pay above the Award rate.

FORGET

This is a common mistake caused by a lack of time or resources, but it can be addressed with the right tools. Reminders and automated notifications within e-PayDay Go FREEPAY® are simple but effective tools for staying on top of your Payroll tasks.

NEGLECT

Our Update Awards Automation Tool continually monitors the Modern Awards and immediately notifies you of changes.

This versatile built-in functionality also streamlines the complex process of adjusting wages in response to FWC's Wage changes. You can also decide whether their above-award rate should be adjusted to reflect the increase or absorbed.

Ensuring compliance with Fair Work is straightforward and manageable, including your employees' pay slips.
Your employees also benefit from clearly identifying the Award and Classification under which they are being paid, which is available on their pay slip. This straightforward inclusion offers additional assurance and the capability to verify that they are being paid accurately, as this information is the foundation of the pay calculations.

If an Enterprise or Registered Agreement is in place, it is shown on the pay slip along with the name of the underpinning Award.

Pay slips also include a link to Fair Work, which provides relevant compliance information for your employees.

Begin your journey for free, effortlessly ensuring you comply with the Fair Work requirements and helping you meet your ATO payroll governance obligations.
Starting with our free payroll software for fewer than 4 employees, we help you be Fair Work compliant and meet your ATO payroll governance obligations. All our payroll plans, starting from $99 per year, include these and many other powerful features. We have helped small businesses comply with payroll requirements since our first free payroll software product was released in 1987.
Comments