b'CLOSING LOOPHOLES CLOSING LOOPHOLESWAGE THEFT When: 1st January 2025Wage theft occurs where an employer intentionallyengages in conduct that results in the failure to pay anemployee their minimum statutory entitlements (i.e. What it is:entitlements arising under the Fair Work Act 2009, or a fair work instrument such as a modern award orWhere an employer intentionally engages in enterprise agreement)dened as required amounts. conduct that results in failure to pay Given the seriousness of a nding that wage theft has entitlements set by the FWA, Awards or occurred, fault must be proven to the requisite criminal Agreementsstandard, being beyond reasonable doubt. To that end, Extends to related offences e.g. intention must be proven in relation to the conduct accessories, attempts, being complicit, that is, that there is proof beyond reasonable doubt that procuring others to commit, conspiracy to the employer intended for their conduct to result in the committhis can implicate employees, non-payment of the required amount. ofcers and agents of the employer What it isnt:What happens?:Penalties include a term of up to 10 years Genuine, inadvertent payroll mistakesimprisonment, and/or a ne up to the greater of 3 timesthe underpayment amount (being the differencebetween the required amount and the amount actuallypaid to the employee) and 5,000 penalty units(currently $1,650,000) for an individual or 25,000Key Changes:penalty units (currently $8,250,000) for a bodyIntentional underpayment of wages (dubbed wage corporate. theft) by employers will become a criminal offence.Interesting Statistic:0 Prosecutions since 1 January 2025Practical Tips for Employers: Remembering that this legislation is designed to penalise employers who intentionally fail to pay an employee theirentitlements, the practical steps for employers to take are: 1) Know your industrial instrument (the Fair Work Act, Modern Award or Enterprise Agreement) and the employees entitlements under these. 2) Carefully and periodically assess positions and their classication under the instrument to ensure the correct classication level is applied. 3) Conduct thorough annual wage compliance checks (including for employees on salaries, all up (loaded) hourly rates, and Enterprise Agreements).4) Keep records of assessments and decisions made (to prove the right intent even if the decision is deemed incorrect by the FWO in future).Page | 7IR Update July 2025'