Wage Theft Laws for 2025: What Regional SME’s Need to Know

January 31, 2025
wage theft laws

On January 1, 2025, significant changes to Australian workplace laws came into effect, making wage theft a criminal offence. Under the Department of Employment and Workplace Relations’ “Closing Loopholes” agenda, businesses found guilty of deliberate wage theft may face severe penalties, including fines and criminal convictions.

For small and medium-sized enterprises (SMEs), particularly in regional areas, these laws highlight the importance of ensuring payroll compliance. Beyond avoiding penalties, staying compliant protects your reputation and strengthens trust within your community.

At MBC Group Services, we’re here to help regional businesses navigate these changes with confidence, ensuring your compliance processes are not just up to date but also tailored to the unique needs of your business.

What Is Wage Theft?

Wage theft refers to the underpayment or withholding of employee entitlements, whether intentional or accidental. This can include:

  • Unpaid overtime or penalty rates
  • Missed superannuation contributions
  • Errors in leave calculations or allowances

The new laws aim to hold businesses accountable and create fairer outcomes for workers. Deliberate wage theft will now carry criminal consequences, making it essential for SMEs to establish robust payroll processes.

What are the new Wage Theft Laws?

From January 2025, wage theft will arise where an employer intentionally engages in conduct which results in a failure to pay an employee an amount due to them.

Contraventions will attract a maximum penalty of:

  • for employers, maximum fine is the higher of 3 times the underpayment or $8.25 million ; and
  • for individuals, the fine is the higher of 3 times the underpayment or $1.65 million and or 10 years imprisonment.

Why Compliance Matters for Regional Businesses

In regional communities, a business’s reputation is everything. Compliance with wage theft laws isn’t just about avoiding penalties; it’s about safeguarding the trust that sustains your business.

Here’s why compliance is vital:

  • Build Employee Trust: Fair pay practices foster loyalty and long-term commitment from your team.
  • Avoid Community Backlash: In close-knit regions, allegations of wage theft can spread quickly, damaging your reputation and making it hard to retain staff or attract customers.
  • Strengthen Your Local Network: Ethical practices enhance your reputation as a responsible employer, building stronger relationships with customers, suppliers, and local stakeholders.

Failing to comply can lead to serious consequences, from financial penalties and legal issues to lost trust and damage to your business relationships.

Steps to Protect Your Business

To ensure compliance with the new wage theft laws, here’s what you can do:

  1. Audit Your Payroll Systems:
  2. Conduct a thorough review of payroll practices to identify discrepancies. Pay close attention to award rates, overtime, and superannuation.
  3. Stay Educated on Legislation:
  4. Keep up with updates from the Department of Employment and Workplace Relations. You can find detailed information about the upcoming changes here.
  5. Seek Expert Advice:
  6. Partner with trusted advisors like MBC Group Services to ensure your systems meet all compliance requirements.
  7. Leverage Technology:
  8. Modern payroll software minimises errors and ensures your records are accurate and accessible.
  9. Train Your Team:
  10. Equip your payroll and HR staff with the knowledge to manage compliance confidently.

How MBC Group Services Can Help You Stay Compliant

Navigating payroll compliance can be overwhelming, especially for regional SMEs managing multiple responsibilities. At MBC Group Services, we simplify the process and help protect your business.

Here’s how we can support you:

  • Reliable Payroll Processing: We ensure your payroll system runs smoothly, accurately calculating wages, penalty rates, superannuation, and entitlements.
  • Payroll System Accuracy Checks: We review your payroll setup to identify errors, prevent discrepancies, and ensure all payments align with your business’s records.
  • Collaboration with HR Experts: While we handle the numbers, we encourage you to work with an HR consultant to confirm the correct award classifications and entitlements for your employees.
  • Technology-Driven Accuracy: We can recommend and implement payroll tools to streamline processes and reduce errors.
  • Ongoing Support: From payroll to BAS, superannuation, and financial reporting, we provide end-to-end support for your compliance needs.

Ready to Protect Your Business?

Compliance with wage theft laws isn’t just a legal requirement—it’s an opportunity to build trust, strengthen relationships, and secure your business’s reputation.

Don’t leave compliance to chance. Book a call with our expert bookkeeping team today to ensure your payroll systems are accurate, compliant, and tailored to your business’s needs.