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Wage Theft Legislation Changes

Wage Theft Laws: What SME’s Need to Know for 2025

As of January 1, 2025, new workplace laws around wage theft will come into effect, signaling a crucial shift for Australian businesses. Under the “Closing Loopholes” agenda, announced by the Department of Employment and Workplace Relations , wage theft will officially be a criminal offence, with severe penalties for those who breach the rules.

For small and medium-sized enterprises (SMEs), this is a timely reminder to evaluate compliance systems, review payroll practices, and ensure your employees are paid what they are owed. At DFK Everalls, we’re here to help you navigate these changes with confidence and protect your business.

What Is Wage Theft?

Wage theft refers to the underpayment or withholding of employee entitlements, whether deliberate or accidental. This can include unpaid overtime, missed penalty rates, unpaid leave, or even superannuation discrepancies.

With the new laws, deliberate wage theft will become a criminal offence, reinforcing the need for SMEs to implement robust payroll processes. According to the Department of Employment and Workplace Relations , this legislative reform aims to deliver fairer outcomes for workers across Australia, while holding businesses accountable for unethical practices.

Why Should SMEs Be Concerned?

Even if your business prides itself on integrity, wage theft laws present challenges that require attention:

  • Criminal Penalties: Businesses found guilty of deliberate wage theft may face fines, legal actions, or even criminal convictions.
  • Industries Under Scrutiny: Sectors like retail, hospitality, and construction, where casual or award-reliant employees are common, are likely to see greater regulatory focus.
  • Complex Compliance: Honest mistakes, such as misinterpreting awards or payroll errors, won’t shield businesses from consequences. SMEs, with leaner administrative teams, are particularly vulnerable.

The Council of Small Business Organisations Australia (COSBOA)  has urged SMEs to treat this as a wake-up call, emphasizing the importance of proactive compliance measures.

Steps to Protect Your Business

To prepare for the new laws, SMEs should act now to ensure compliance and avoid any unnecessary risks. Here’s how you can get started:

  1. Audit Your Payroll Systems:
  2. Conduct a full review of your payroll practices to identify potential errors or discrepancies. Look closely at award rates, overtime, superannuation, and other entitlements.
  3. Stay Educated on Legislation:
  4. Regularly check updates from the Department of Employment and Workplace Relations and other government resources to stay informed about wage theft laws and compliance guidelines.
  5. Seek Professional Advice:
  6. Compliance can be complex. Partner with a trusted advisor, like DFK Everalls, to ensure your payroll systems meet all requirements.
  7. Leverage Technology:
  8. Invest in modern payroll software or compliance tools to minimize errors and maintain accurate records.
  9. Train Your Team:
  10. Equip your HR and payroll staff with up-to-date knowledge of workplace laws through training programs or workshops.

What Are the Consequences of Non-Compliance?

Failure to comply with wage theft laws can lead to:

  • Hefty fines for businesses and individuals responsible for payroll processes.
  • Damage to your business’s reputation, affecting relationships with employees and customers.
  • Criminal charges for deliberate or repeated breaches, which can result in significant legal and financial consequences.

Why Compliance Matters

Beyond avoiding penalties, compliance is an opportunity to build trust with your team and showcase ethical leadership. Employees who feel valued and fairly treated are more likely to contribute positively to your business, boosting morale and productivity.

At DFK Everalls, we understand the pressures SMEs face in managing compliance alongside day-to-day operations. That’s why we’re committed to providing expert advice, practical tools, and tailored solutions to simplify this process for you.

Ready to Protect Your Business?

Don’t leave compliance to chance. Book a call with our team today to ensure your payroll practices minimise risk of underpaying your team. Our specialists at DFK Everalls will guide you through compliance audits, risk reduction strategies, and system improvements, giving you peace of mind.

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