Wage Theft Is Now a Criminal Offence in Australia: Is Your Payroll (and Your Freedom) Exposed?
By Timothy, CPA — Managing Director of Professional Financelink (PFL)
Note: The scenarios in this post are based on real experiences — mine and those shared by colleagues across the sector. Details might have been changed and modified slightly to protect confidentiality, and mostly used 1st person perspective for convenience.
Picture This
You're the Head of Finance. Payroll runs like clockwork every fortnight — no complaints, no drama. Your payroll officer's been doing it for years. Auditors haven't flagged anything. You've got bigger things to worry about: month-end, board papers, grant acquittals.
Then one quarter, you finally get around to reconciling superannuation properly — not just checking the totals, but matching payment dates against due dates. And there it is. One quarter where super was lodged nine days late. Not a missing payment. Not the wrong amount. Just... late.
Under the old rules, that's an SG charge calculation and a quiet fix. Under the new rules — effective 1 January 2025 — intentional wage underpayment is a criminal offence. Up to 10 years' imprisonment for individuals. Up to $8.25 million in fines for companies. And yes, late super counts.
Sound familiar? Or are you still confident your payroll is perfectly clean?
What I Actually Found
I ran into something very similar not long ago. During a routine superannuation reconciliation, I discovered a single instance where a payroll officer had processed the super payment after the quarterly deadline. The amount was correct. It was just late.
On the same exercise, I also found that a couple of employees had been sitting at an outdated award classification level. They'd gained qualifications, their responsibilities had grown — but nobody had updated their level in the payroll system. The annual pay review adjusted for the Fair Work minimum wage increase, but never re-checked the classification itself.
Neither issue was malicious. Both were the kind of thing that quietly accumulates when payroll is treated as "set and forget." But under Section 327A of the Fair Work Act, the moment you know about a gap and don't act, the line between "honest mistake" and "reckless indifference" starts to blur.
From discovery to remediation — back-pay calculations, SG charge reporting, and a board briefing — it took roughly a week.
The Safeguards I Put in Place
Fixing the immediate issue was the easy part. The harder question was: how do we make sure this doesn't happen again — even by accident?
I won't lay out the full playbook (every organisation's setup is different, and this is exactly the kind of work I do through PFL), but here are two safeguards that made the biggest difference:
1. A quarterly "payroll vs award" spot-check. Every quarter, we now pull a random sample of 10–15 employees and cross-reference their current classification, pay rate, and qualifications against the applicable award. It takes about an hour and catches drift before it compounds. The key is making it a recurring calendar item, not something that depends on someone remembering.
2. A super payment verification step. Before the super payment is finalised each quarter, it comes to me for a quick reconciliation — confirming both the amount and the lodgement date against the ATO deadline before I sign off. We both have it locked in our calendars as a recurring reminder. It adds five minutes to the process and eliminates the "it went out late and nobody noticed" scenario entirely. And one more thing people often miss: the compliance deadline is based on when the employee receives the super in their fund — not when you process it in your system or when the money leaves your bank account. That distinction matters, especially when a new starter hasn't provided their fund details yet. You're still on the clock.
Small changes. But the kind that turn "we think we're compliant" into "we can prove we're compliant" — which is exactly what matters if the FWO ever comes asking.
The One Thing I'd Tell Every Finance Leader
You don't need to overhaul your entire payroll function. You need to look. Pull the data. Reconcile the dates. Cross-check the classifications. Most of the risk I've seen doesn't come from fraud — it comes from drift, assumptions, and nobody having the time to verify what everyone assumed was fine.
The law has changed. The consequences have changed. The only question is whether you find the gaps yourself, or someone else finds them for you.
If you don't have the bandwidth to do this internally — or you want a second pair of eyes from someone who's been through it — that's what PFL is here for. We can even help you build an AI-enhanced checking tool to make the whole process a bit easier.
Have you run into something similar? A payroll gap you caught just in time — or one that caught you off guard? I'd love to hear your experience in the comments. No names needed — the more we share these stories (anonymously), the more we all learn from each other.
Sources
- Fair Work Ombudsman — Criminalising Wage Underpayments
- DEWR — New Wage Theft Criminal Offence Commencement
- ACCI Guide — Criminal Wage Theft
- BDO — Criminalisation of Wage Underpayment
About the Author
Timothy, CPA is a finance leader with nearly 20 years of experience across NFP, NDIS, aged care, and SME sectors. He is the Managing Director of Professional Financelink (PFL), providing outsourced finance, payroll compliance, and AI automation services to Australian businesses.
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