Wage Theft Criminal Offence Australia (2026 Legal Guide) — Rules & Requirements
About this article
Sourced from Commonwealth Acts of Parliament, federal regulations, and official government guidance. State-level information reflects each state's own Acts and court decisions. Written in plain language for general understanding — this is educational content, not legal advice. Our editorial standards
What is this right?
From 1 January 2025, an employer that intentionally underpays wages or entitlements is committing a criminal offence under section 327A of the Fair Work Act. This is on top of — not instead of — the existing civil-penalty regime for underpayment.
Penalties are deliberately heavy to deter what was previously a low-risk practice:
- Individuals (directors, payroll managers): up to 10 years' imprisonment and/or the greater of 3× the underpayment or $1.565 million.
- Body corporates: the greater of 3× the underpayment or $7.825 million.
The Voluntary Small Business Wage Compliance Code (in force from 1 Jan 2025) shields small employers (fewer than 15 employees) that comply with the Code from criminal prosecution — civil-penalty exposure remains. Larger employers can apply for a cooperation agreement with the Fair Work Ombudsman to self-disclose and avoid referral for prosecution.
The offence requires intent — honest payroll errors and miscalculations remain civil matters. Federal Court enforcement, FWO investigations, and the existing 6-year limitation period for civil recovery still run in parallel.
When does it apply?
- Underpayment occurred on or after 1 January 2025 (the offence is not retrospective).
- The employer knew of the entitlement and intentionally failed to pay (recklessness alone is not enough; carelessness is a civil matter).
- The unpaid entitlement is one covered by the FW Act, a modern award, an enterprise agreement, an FWC order, or the National Minimum Wage Order.
- Applies to both wages and superannuation entitlements payable under the Act.
What to Do If Your Australian Employer Has Intentionally Underpaid You
- Document the underpayment. Calculate the gap (award rate vs paid rate × hours), keep pay slips, timesheets, rosters, and any emails about pay.
- Raise it in writing with your employer first. Many underpayments are payroll errors; written notice gives the employer the chance to fix it and avoid escalation.
- Lodge a complaint with the Fair Work Ombudsman at fairwork.gov.au or call 13 13 94. The FWO investigates and refers serious intentional cases to the Commonwealth Director of Public Prosecutions (CDPP).
- You can still recover the unpaid amount yourself in the Federal Circuit and Family Court (Small Claims division up to $100,000) — the criminal offence runs alongside the civil claim.
- Free advice: union, community legal centre, or the Fair Work Infoline.
What should you NOT do?
- Don't sign a deed of release waiving claims for less than the full amount without legal advice.
- Don't let the 6-year limit run. Civil underpayment claims must be filed within 6 years of when the underpayment occurred.
- Don't assume the criminal offence helps you personally recover. Criminal prosecutions belong to the CDPP — your civil claim is the route to recover your money.
About Workers' Rights in Australia
If you work in Australia, the Fair Work Act 2009 is the floor. The National Employment Standards set 11 minimum entitlements — hours, leave, parental leave, notice — that no contract can undercut. The Fair Work Commission handles unfair dismissal and approves enterprise agreements; the Fair Work Ombudsman investigates underpayments. Workplace safety runs through state WHS Acts, and discrimination is caught by both the Act's general protections and the federal RDA, SDA, and DDA.
Common Questions
What is the criminal wage underpayment (wage theft) right in Australia?
From 1 January 2025, an employer that intentionally underpays wages or entitlements is committing a criminal offence under section 327A of the Fair Work Act. This is on top of — not instead of — the existing civil-penalty regime for underpayment.Penalties are deliberately heavy to deter what was previously a low-risk practice:Individuals (directors, payroll managers): up to 10 years' imprisonment and/or the greater of 3× the underpayment or $1.565 million.Body corporates: the greater of 3× the underpayment or $7.825 million.The Voluntary Small Business Wage Compliance Code (in force from 1 Jan...
When does criminal wage underpayment (wage theft) apply?
Underpayment occurred on or after 1 January 2025 (the offence is not retrospective).The employer knew of the entitlement and intentionally failed to pay (recklessness alone is not enough; carelessness is a civil matter).The unpaid entitlement is one covered by the FW Act, a modern award, an enterprise agreement, an FWC order, or the National Minimum Wage Order.Applies to both wages and superannuation entitlements payable under the Act.
What should I do if my employer in Australia is deliberately underpaying me?
Document the underpayment. Calculate the gap (award rate vs paid rate × hours), keep pay slips, timesheets, rosters, and any emails about pay.Raise it in writing with your employer first. Many underpayments are payroll errors; written notice gives the employer the chance to fix it and avoid escalation.Lodge a complaint with the Fair Work Ombudsman at fairwork.gov.au or call 13 13 94. The FWO investigates and refers serious intentional cases to the Commonwealth Director of Public Prosecutions (CDPP).You can still recover the unpaid amount yourself in the Federal Circuit and Family Court (Small...
What mistakes should I avoid with criminal wage underpayment (wage theft)?
Don't sign a deed of release waiving claims for less than the full amount without legal advice.Don't let the 6-year limit run. Civil underpayment claims must be filed within 6 years of when the underpayment occurred.Don't assume the criminal offence helps you personally recover. Criminal prosecutions belong to the CDPP — your civil claim is the route to recover your money.