• Unpaid overtime
• Failure to pay minimum wages or penalty rates
• Misclassification of employees as independent contractors
• Illegal deductions from wages for items like uniforms or equipment.

1. Criminalisation of Intentional Underpayment
   Employers who deliberately fail to pay employees their lawful entitlements can now face criminal charges. This includes wages, leave entitlements, superannuation, a salary sacrifice arrangement and other benefits owed under industrial agreements or legal requirements.
2. Severe Penalties

• The criminal offence provisions don’t apply to all entitlements for certain employees, for example: employees in New South Wales, South Australia, Queensland, Tasmania, and Victoria working for sole traders, partnerships, unincorporated entities, or non-trading corporations, as well as most Victorian state government employees and Tasmanian local government employees.
• Example of penalties for companies can be up to $8.25 million in fines or three times the underpayment amount (whichever is higher).
• For individuals (e.g., directors): Up to 10 years imprisonment and/or fines up to $1.65 million or three times the underpayment amount.

3. Enhanced Enforcement Powers
   The Fair Work Ombudsman (FWO) has been granted greater authority to investigate wage theft and refer cases for criminal prosecution by the Commonwealth Director of Public Prosecutions or the Australian Federal Police.
4. Focus on High-Risk Industries
   Sectors like retail, hospitality, and construction where casual employment is common, are expected to face increased scrutiny due to a history of wage non-compliance.

• Understand Legal Obligations: Familiarise yourself with modern awards, enterprise agreements, and the Fair Work Act 2009.
• Review Payroll Systems: Audit payroll practices to identify and rectify any discrepancies.
• Adopt Compliance Programs: Small businesses can benefit from the Voluntary Small Business Wage Compliance Code, which offers protections for unintentional errors.
• Train Staff: Ensure HR and payroll teams are well trained and equipped with up-to-date knowledge of wage obligations.

• Employees who report wage theft are safeguarded against retaliation or unfair dismissal.
• Underpaid workers can seek redress through civil penalties if intentional conduct cannot be proven beyond a reasonable doubt.
• An employer who self-reports conduct that could be a criminal underpayment offence can request to enter a cooperation agreement with Fair Work. In this case, they will not refer any conduct covered by the agreement for criminal prosecution.

• Small and medium-sized enterprises (SMEs) may struggle with the complexity of compliance.
• The requirement to prove “intent” in criminal cases sets a high bar for prosecution but ensures that only deliberate violations are penalised.

Stay informed and take proactive measures to educate yourself and your team on these changes to ensure your business remains compliant. Educational activities can include qualifications and CPE.

To ensure compliance with the new wage theft laws and to enhance understanding of payroll systems, the FNS50422 Diploma of Payroll Services is an ideal educational pathway for businesses and individuals. This qualification provides comprehensive knowledge and practical skills in managing payroll functions, including compliance with relevant laws, tax obligations, and workplace entitlements.

Benefits of the Diploma of Payroll Services:

• In-depth Understanding of Payroll Compliance: Gain a thorough understanding of current legislation, including wage theft laws, and how to apply them in day-to-day payroll functions.
• Practical Skills: Learn to manage and process payroll, ensure accurate wage calculations, handle leave entitlements, superannuation, and other employee benefits in line with legal requirements.
• Up-to-date Knowledge: Stay informed on best practices and legislative changes in the payroll industry, which will help you navigate complex payroll systems effectively.
• Risk Mitigation: Equip yourself with the skills to identify and address potential issues before they lead to non-compliance, reducing the risk of penalties.
• Boost Credibility: Completing the Diploma of Payroll Services helps build trust with employees and stakeholders, showcasing your commitment to ethical payroll practices.

Learn More: FNS50422 Diploma of Payroll Services or My CPE Payroll Specialist Annual Subscription

Ensuring compliance with the Tax Agent Services Act, proper disclosures to clients, managing false and misleading statements, and ultimately, ensuring competent provision of services.

The Regulatory Framework

If you’re unfamiliar with the regulatory framework, it all stems from the Tax Agent Services Act 2009, flowing through the Code of Professional Conduct, and ultimately being enforced via Section 40 of the Tax Agent Services Code of Professional Conduct Determination. This section mandates the obligation to establish and maintain a quality management system for BAS agents and bookkeepers. Your QMS should be designed to provide confidence that you are meeting your professional conduct obligations and ensuring the accuracy of financial records. Additional details are available here https://www.tpb.gov.au/code-determination-background-and-context