Changes to wage theft provisions in 2025
Dean Tolkin outlines upcoming changes to wage theft laws in 2025, highlighting the introduction of criminal sanctions and increased penalties for employers who underpay staff, while stressing the importance of compliance to avoid severe consequences.
About the speaker
Dean was shortlisted as a finalist in the Lawyers Weekly 30 under 30 Awards for Workplace Relations, Employment and Safety for three consecutive years (2017 – 2019) and was fortunate to have won this prestigious award in 2018. Dean was also recognised in 2018 in the Australian Law Awards as a finalist in the categories of Rising Star of the Year and Senior Associate of the Year and has been recognised as a leading employment law specialist.
Summary
In this critical update, Dean Tolkin breaks down the upcoming changes to wage theft laws in 2025, highlighting the introduction of criminal sanctions and increased financial penalties for businesses found guilty of underpaying employees. These legislative changes reflect the Australian government's tougher stance on wage theft, aiming to hold employers accountable for compliance failures.
With regulators placing greater scrutiny on payroll practices, businesses must take proactive steps to review their wage audit processes, modern award compliance, and payroll accuracy to avoid severe legal and financial consequences. The new provisions mean higher penalties, potential criminal charges for directors and executives, and stricter enforcement measures, making wage compliance a top priority for all employers.
Key changes and takeaways
- Introduction of criminal sanctions for wage theft
- Increased financial penalties for employers who underpay staff
- How businesses can prepare for stricter enforcement measures
- The importance of regular wage audits to avoid non-compliance
- Best practices to ensure accurate payroll processing and employee payments
- How Fair Work Australia’s expanded powers will impact businesses
With wage theft laws evolving, staying ahead of compliance requirements is more important than ever. Watch the full interview to learn how these 2025 legal changes will affect businesses and what steps employers need to take to protect themselves from penalties and reputational damage.
Transcript
0:00
There are some significant reforms coming into play from 1 January 2025 so far as the wage theft provisions are concerned. So we now have criminal sanctions and criminal ramifications for employers that intentionally or deliberately underpay their staff. Most employers are unlikely to fall into that bucket, so to speak, but these new provisions have serious teeth and carry criminal liability.
0:24
But suffice to say that putting the criminal regime to the side, there is still in place a civil regime that penalises employers and potentially officers and directors of companies personally for being involved in wage theft issues. So those are, that's a civil standard, that's a civil liability provisions. And those provisions are still there. And from 1 January the sanctions and the penalties are going up significantly.
0:47
So this is an area that I think will be fertile ground for the Fair Work Ombudsman for many years to come. We see the ambushment regularly investigating and prosecuting employers and there are some, some hot industries that the Fair Work Ombudsman is targeting including you know, hospitality, the aged care sector, the childcare sector and a host of others.
1:08
And so we're dealing, we're working with clients to ensure that they are absolutely tip top in their compliance to avoid being, you know, potentially subject to some kind of investigation, especially in light of these very new and very serious contravention provisions that are coming into place under the Fair Work Act from 1 January next year.
