Closing Loopholes: Fair Work Act changes

A new criminal offence for intentional underpayments by employers will be added to the Fair Work Act as part of the new ‘Closing Loopholes’ laws from no earlier than 1 January 2025.

We (the Fair Work Ombudsman) will investigate suspected criminal underpayment offences once the changes take effect.

Learn more at Closing Loopholes: Fair Work Act changes.

We can take a matter to court where there has been a contravention of Australian workplace laws.

For example, if an employer is asked by us to pay their employees what they’re owed and they don't pay the employee, we can take the employer to court.

When we take a matter to court

Our decision to litigate will depend on whether we have enough evidence and whether it’s in the public interest. Our Compliance and Enforcement Policy talks about these factors in more detail.

If the employer is a company, we can take the company to court, but we can also take a person to court if they were 'involved in' the company’s contravention. A person involved in the company’s contravention may include:

  • a company director
  • a human resources manager or other manager
  • an accountant
  • a business involved in the supply chain.

If you’re thinking about taking your own legal action and your claim is for an amount of $100,000 or less, see Legal action in the small claims court for further information.

Court orders

If litigation is successful, a court may impose orders against a person found to have done the wrong thing. Those court orders may:

  • make a person pay an amount of money as a penalty for not doing what the law says, up to:
    • $18,780 per contravention for an individual
    • $93,900 per contravention for a company with less than 15 employees
    • $469,500 per contravention for a company with 15 or more employees.
  • make a person pay a higher penalty for some 'serious contraventions', up to:
    • $187,800 per contravention for an individual
    • $939,000 per contravention for a company with less than 15 employees
    • $4,695,000 per contravention for a company with 15 or more employees.
  • make an employer who has been issued with a notice (for example, a compliance notice or a notice to produce records) comply, wholly or partly, with its terms
  • make an employer or other person pay an employee their outstanding entitlements (plus interest)
  • require someone to do something (for example, give an employee their job back) or undertake training or do an audit
  • restrain someone from doing something (an injunction or interim injunction) for example, stop discriminating against an employee, or
  • pay an employee compensation for loss suffered.

Serious contraventions

A serious contravention happens when the court finds that:

  • the person or business knew they were contravening an obligation under workplace laws, or
  • the person or business was reckless as to whether the contravention would occur.

The higher penalties for serious contraventions apply to breaches of:

If someone else was involved in the contravention, and knew it was a contravention, they could also face higher penalties.

When there are no records

If an employer doesn't meet their record-keeping or pay slip obligations, and can't give a reasonable excuse, they will need to disprove allegations in wage claims made in a court. This is sometimes referred to as a 'reverse onus of proof.'

This applies in court proceedings relating to breaches of:

If an employee makes a claim for breach of one or more of the above obligations and the employer didn’t keep the right records, make those records available, or give them a pay slip, the employer needs to prove that they did pay the employee correctly or gave them the right entitlements.

Check Pay slip and record-keeping obligations for information about what records employers need to keep.

Related information