Fair Work urges employers to comply with new Closing Loopholes law

The Fair Work Ombudsman (FWO) Anna Booth has urged employers to pay attention to the important changes to the Fair Work Act, which include the creation of a criminal offence for intentional underpayment. 

 

“We urge workplace participants to be across the changes which create new or different rights or responsibilities,” Ms Booth said.

 

“There can be significant penalties where the laws are not followed – including jail time for the new criminal offence – but we want employers to get it right in the first place and are here to help with free information and advice to ensure they do.”

 

Many of the changes commenced on 15 December 2023, while others will be rolled out between now and 2025. Some of the changes affect the work of the FWO, while others affect the work of the Fair Work Commission, the national workplace relations tribunal.

 

Criminalising intentional wage underpayments

 

Starting not before 1 January 2025, intentional underpayments of wages by employers will be a criminal offence.

 

Employers may commit an offence if they owe money to an employee under the Fair Work Act or an industrial instrument (like an Award or an enterprise agreement), and intentionally engage in conduct that results in a failure to pay on or before the money is due. This can include failure to make required superannuation contributions.

 

A Voluntary Small Business Wage Compliance Code will be established before the changes take effect, and compliance with this Code means a small business won’t be prosecuted if they underpay their employees.

 

Companies prosecuted face penalties three-times the amount of the underpayment, if a court can determine it, or $7.825 million, whichever is greater. If the court can’t determine the underpayment, the maximum penalty is $7.825 million.

 

Individuals can be imprisoned for up to 10 years; be fined either three-times the amount of the underpayment, if the court can determine it, or up to $1.565 million, whichever is greater; or be both fined and imprisoned.

 

“Employers should know – these laws don’t apply to those who unintentionally underpay their employees or pay the wrong amount by mistake,” Ms Booth said.

 

The Fair Work Ombudsman will, once the offence takes effect in 2025, investigate suspected criminal underpayment offenses.

 

New discrimination protections

 

From 15 December 2023, employers cannot discriminate by taking adverse action against employees because they have been subjected to family and domestic violence.

 

Awards and enterprise agreements must also not include terms that discriminate against an employee because they’re experiencing (or have experienced) family and domestic violence.

 

Further information 

 

A special webpage has been created to outline the important changes made by the Closing Loopholes laws. Readers can also subscribe to updates and stay across changes to the law via the FWO’s subscription centre.

 

For more information on the new rules regarding fixed term contracts please see here. 

 

Small business employers can access the FWO’s Employer Advisory Service for free tailored written advice about pay and conditions.

 

Employers and employees can also visit www.fairwork.gov.au or call the Fair Work Infoline on 13 13 94 for free advice and assistance about their rights and obligations in the workplace. An interpreter service is available on 13 14 50.