Employees have the right to be paid the correct pay rate for all time worked. Depending on the type of work you do, your minimum pay rate may be outlined in legislation, your contract of employment or the relevant award or workplace agreement under which you are employed. If you are receiving less than your applicable minimum wage, you may be a victim of wage theft.
What is wage theft?
The employment relationship is built upon an imbalance of power. More often than not, an employer will retain the authority to determine their workers’ wages and other conditions of employment. In light of this imbalance, it is not surprising that some employers regularly take advantage of workers to obtain financial gain.
Wage theft is the practice of paying workers less than they are entitled to under Australia’s workplace relations system [1]. Most commonly, wage theft will involve an employer deliberately underpaying less than the minimum hourly rate. However, it can also take on a variety of other forms. These include, but are not limited to –
- Unpaid superannuation;
- Failing to pay an employee’s entitlement to penalty rates, overtime and allowances;
- Failing to pay for trial or training periods;
- Taking inappropriate deductions from wages for things such as cash shortages, accommodation and transport costs;
- Refusing to pay personal, annual or other forms of compensated leave
Wage Theft Law in Australia
In Australia, it is illegal for an employer to withhold an employee’s statutory entitlements. Under the Fair Work Act, an employer is prohibited from contravening the national minimum wage order, the National Employment Standards (NES), a modern award or an enterprise agreement. If an employer breaches their obligations under the Act, a court may impose a civil penalty such as a monetary fine or order the employer to repay their victim’s wages.
Some states aim to crack down further on Australia’s wage theft epidemic by introducing specific criminal offences. In June 2020, Victoria became the first state in Australia to pass laws that establish criminal penalties for employers who deliberately underpay their workers or withhold other employment entitlements [2].
New Federal Legislation (2025 Update)
As of 1 January 2025, intentional underpayment of employee wages or entitlements is now a criminal offense across Australia. This new federal law introduces significant penalties for deliberate wage theft, including substantial fines and potential imprisonment.
The legislation also provides clarity by distinguishing between deliberate underpayment and honest mistakes made by employers exercising due diligence. Small businesses can further safeguard themselves by adhering to the Voluntary Small Business Wage Compliance Code, demonstrating their commitment to fair payment practices.
Changes to State-Based Wage Theft Laws
Victoria, which was the first state to introduce criminal penalties for wage theft under the Wage Theft Act 2020 (Vic), has now ceded enforcement of wage theft laws to the federal system. As a result, Victoria’s Wage Inspectorate focuses on education and support while serious cases are handled by the Fair Work Ombudsman (FWO) under federal law. See article on Victoria’s Wage Theft Laws
Similarly, other states like Queensland and New South Wales have adjusted their enforcement mechanisms to align with the federal framework. The new federal system simplifies reporting and enforcement, ensuring consistent application of wage theft laws nationwide.
Recent Examples of wage theft in the media
Wage theft occurs across many different industries and occupations but is particularly rampant in hospitality. In a recent survey conducted by the Hospo Voice union, 82% of workers reported some form of wage theft in their current or previous hospitality job. Hospitality workers are often employed on a casual basis. Due to the precarious nature of their employment, these workers may avoid speaking up about wage theft in fears that their employer may cut back their hours or stop giving them shifts altogether.
You may be familiar with some celebrity restaurant wage theft scandals reported in the media. Former MasterChef judge George Calombaris was recently busted for underpaying $7.83 million in wages to more than 500 employees across his stable of popular restaurants. In addition to an order to pay back the wages, Calombaris has since been slapped with a $200,000 fine and signed an undertaking to ensure improved wages and record-keeping [5].
In 2018, former high-end Melbourne restaurant ‘Dinner by Heston’ also came under fire for wage underpayment. The Fair Work Inspector responsible for looking into the allegations formed a reasonable belief that the restaurant sponsored by British culinary royalty Heston Blumenthal potentially owed its employees millions of dollars in wages and other entitlements [6]. However, rather than complying with a notice to resolve the outstanding underpayment issues, the company has since entered into voluntary liquidation.
These examples should serve as a warning to all employers that the exploitation of workers will have significant and lasting consequences for the ongoing viability of their business.
What to do if you’re a victim or suspected victim of wage theft
If you suspect you are a victim of wage theft, it is important to be aware of your options.
- Raise the Issue with Your Employer: Attempt to resolve any concerns directly with your employer. Many disputes can be resolved informally without escalating to formal proceedings.
- Contact Relevant Authorities:
- The Fair Work Ombudsman (FWO) is the primary body investigating wage theft across Australia. They offer assistance and can take enforcement action where required.
- Victorian residents can still contact the Wage Inspectorate Victoria for guidance and support, but enforcement is now under federal jurisdiction.
- Seek Professional Advice: Consult your relevant union or seek legal advice to better understand your rights and the best course of action.
By Kirra Griffin June 2021 – Updated 15th January 2025
Kirra Griffin is a final-year law student at Melbourne Law School. As our resident legal assistant, Kirra uses her specialised knowledge of the law to translate complex concepts into easily digestible information.
Resources
If you require a current 2025 Employment Contract please see RP Emery’s wide range of Fair Work Compliant Employment Agreements.
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