From 1 January 2025, Australian businesses will face significant changes in workplace laws, as intentional underpayment of wages or entitlements will become a criminal offence. This legislative reform aims to ensure fair treatment of employees while introducing protections for businesses that proactively address wage compliance.
What Are the New Laws?
Intentional underpayment occurs when an employer knowingly fails to pay employees their due wages or entitlements. Under the new laws, such deliberate actions can result in criminal charges. If convicted, employers could face:
- Substantial fines
- Imprisonment
- Or both
These changes highlight the government’s commitment to combating wage theft and ensuring that Australian workers receive their rightful pay.
Protections for Businesses: The Voluntary Small Business Wage Compliance Code
To support businesses, especially small employers, the government has introduced the Voluntary Small Business Wage Compliance Code (the Code). Small business employers who comply with the Code in cases of underpayment are shielded from criminal prosecution. By following this Code, businesses can rectify wage discrepancies while demonstrating good faith in meeting their legal obligations.
The Code outlines a step-by-step approach for small businesses to assess their compliance, rectify underpayments, and avoid criminal consequences. This proactive measure also builds trust with employees and ensures the business remains within legal frameworks.
Cooperation Agreements
In addition to the Code, cooperation agreements are available. These agreements encourage businesses to work with regulatory bodies to resolve underpayment issues amicably and avoid prosecution.
Additional Changes from 1 January 2025
The new criminal underpayment laws are part of broader workplace reforms. Other key changes include:
- Entry-Level Classifications in Awards: Adjustments will be made to entry-level pay classifications, ensuring fairer pay for new workers under various awards. Employers must review and update employment agreements to align with these changes.
- Aged Care Work Value Case: Changes to awards within the aged care sector reflect the increased recognition of the value of aged care workers. Employers in this sector must ensure their pay structures comply with the updated standards.
How Can Employers Prepare?
To avoid legal risks, employers should:
- Download and review the Code and Guide: Ensure compliance with wage regulations and take corrective action if underpayment has occurred.
- Review employee pay structures: Conduct a thorough audit of current pay arrangements, including wages, entitlements, and classifications.
- Implement robust payroll systems: Accurate record-keeping and payroll systems are essential to avoid inadvertent errors.
- Seek legal advice: Expert guidance can help employers navigate the complexities of the new laws and implement effective compliance strategies.
NB Employment Law: Your Partner in Navigating Wage Compliance
The upcoming reforms may seem daunting, but you don’t have to face them alone. NB Employment Law is here to guide you through these changes with expert advice tailored to your business needs. Our experienced team can help you:
- Conduct wage audits
- Update employment agreements
- Develop compliance strategies aligned with the new laws
Take the first step towards securing your business and protecting your employees. Book your 30-minute complimentary consultation with NB Employment Law today and ensure your business is ready for the 2025 reforms.
Contact Us Now to schedule your consultation and safeguard your business against legal risks.