From 1 January 2025, intentional wage theft became a criminal offence in Australia under the Fair Work Legislation Amendment (Closing Loopholes) Act. That means employers who deliberately underpay staff can face fines of up to $8.25 million for companies or 10 years’ prison for individuals.
And it’s not a rare problem. The Fair Work Ombudsman (FWO) filed 146 litigations involving visa holder workers, securing nearly $23 million in penalties in the seven financial years to June 2024. Underpayments have been uncovered in industries from hospitality to higher education, including major universities owing millions in unpaid superannuation (refer to FWO newsroom for cases).
Knowing how to spot the warning signs and take action is one of the most important steps in protecting your pay.
What is Wage Theft?
Under the Fair Work Act, wage theft refers to deliberate underpayment of wages or entitlements. It can include:
- Paying less than the minimum award rate or agreed salary
- Not paying overtime or penalty rates
- Failing to pay superannuation
- Withholding allowances or loadings
- Making unlawful deductions
- Misclassifying employees as independent contractors to avoid entitlements
Note: Honest mistakes can still lead to underpayment, but for criminal penalties to apply, the underpayment must be intentional.
Wage Theft vs Underpayment — What’s the Difference?
Wage theft and underpayment both mean a worker is paid less than they’re entitled to — but the key difference is intent, and the legal consequences are very different.
| Underpayment | Wage Theft |
| Being paid less than your legal entitlement under an award, agreement, or the minimum wage. | Deliberate and intentional underpayment of wages or entitlements. |
| Can be caused by mistakes, payroll errors, or lack of awareness of correct rates. | Employer knows they are underpaying and chooses not to correct it. |
| Usually dealt with through backpay and civil penalties. | Since 1 Jan 2025, a criminal offence under the Fair Work Act, with up to 10 years’ prison and multi-million dollar fines. |
| Example: Payroll system doesn’t update after the annual minimum wage increase. | Example: Paying cash-in-hand below award rates and telling staff not to talk about it. |
| One-off or occasional. | Often repeated over time. |
| Often fixed once identified. | Can include fraud or falsifying records. |
If you’re not sure whether your situation is a mistake or intentional, start with our “Is Your Employer Underpaying You?” guide to check your rates and entitlements.
How to Spot Wage Theft (Criminal Offence)
Wage theft isn’t just being paid the wrong amount. It’s when your employer knows they’re underpaying you and chooses not to fix it.
Before you go further:
If you haven’t already confirmed whether you’re actually underpaid, start with our guide Is Your Employer Underpaying You? It walks you through checking award rates, super, penalty rates, and payslips so you can be 100% sure. Once you’ve confirmed your pay is wrong, come back here to see if it’s deliberate.
Here’s how to tell the difference between a genuine mistake and something that could land your employer in court:
1. Look for deliberate patterns, not one-offs
- Pay rates below the award for months or years despite complaints.
- Repeated “errors” that always benefit the employer.
- Overtime or penalty rates consistently missing.
- “Training” rates that never end — staying on reduced pay beyond the legal training period.
2. Watch for falsified or missing records
- Payslips showing fewer hours than you worked or no payslips provided at all.
- “Roster vs reality” mismatches.
- Being asked to clock out but keep working.
3. Identify intentional dodges
- Told you’re a “contractor” without a genuine ABN arrangement but treated like an employee.
- Paid cash-in-hand at below-legal rates.
- Threats or retaliation if you ask about pay.
- International students or visa holders being paid less than locals for the same work.
4. Compare with others in the same role
- Co-workers underpaid in the same way.
- Pay secrecy encouraged (illegal in Australia).
What To Do if You Suspect Wage Theft
If your employer’s actions look intentional, you need to treat it like a criminal matter from the start.
Step 1 — Preserve evidence before confronting
- Keep copies of payslips, rosters, and contracts.
- Save emails, texts, or messages about hours or pay.
- Photograph rosters or notices if they might be altered later.
Step 2 — Document the pattern
- Keep a log of each underpayment incident.
- Note dates you raised the issue and the responses you received.
- Record if the same “error” keeps happening despite being flagged.
Step 3 — Decide if it’s safe to raise internally
- If your workplace has HR or payroll and you won’t face retaliation, you can still ask for an explanation.
- If unsafe, skip straight to reporting.
Step 4 — Report to the Fair Work Ombudsman (FWO)
- Lodge a formal complaint online: fairwork.gov.au
- FWO can investigate, recover money, and refer criminal matters to the Commonwealth Director of Public Prosecutions and the Australian Federal Police.
- Phone: 13 13 94
Step 5 — Get legal advice
- Legal Aid (depending on state)
- Workplace lawyers for complex or high-value cases
- Your union — for representation and legal support
Step 6 — Protect yourself from retaliation
- It’s illegal for employers to fire, demote, or cut your hours because you complained. See more here.
- Document any retaliation immediately.
- Contact Fair Work or seek legal help — you may be entitled to extra compensation.
Why This Matters
Wage theft is a serious issue, but early detection and proactive action can help workers protect themselves before the problem escalates. Wage theft has been — and remains — a widespread issue in Australia, as shown by the Fair Work Ombudsman’s ongoing enforcement actions. While many publicly reported cases involve breaches from previous years, they highlight how persistent and costly underpayment can be.
Alarmingly, many workers don’t even realise they’re experiencing wage theft. This lack of awareness, combined with fear of speaking up, allows some employers to get away with it for years. Here’s an article as an example.
Recent legal changes have strengthened penalties, but systemic challenges remain.
Certain groups are especially vulnerable: young workers, migrants, LGBTQ+ employees, and those in insecure jobs. These workers are often overrepresented in exploitation cases and the least likely to raise concerns.
The power imbalance is clear: workers can face swift consequences for small mistakes, while some employers avoid full accountability for deliberate underpayment through loopholes. That’s why knowing your rights, collecting evidence, and acting early is critical. The sooner you act, the harder it is for employers to dodge responsibility.
At Echochime, our mission is to empower workers by raising awareness and sharing practical information to help them recognise wage theft, understand their rights, and take action early. By being informed and vigilant, workers can reduce the risk of exploitation — instead of relying solely on enforcement after the damage is done.
Recent Wage Theft Cases in Australia
Wage theft has been found in a wide range of Australian workplaces. Investigations by the Fair Work Ombudsman, alongside union reports, show how widespread the problem is:
- Hospitality and Retail — Fair Work investigations have uncovered widespread breaches, including non-payment of penalty rates and overtime.
(Primary source: Fair Work Ombudsman report) - Higher Education — Multiple universities have been ordered to repay millions in unpaid superannuation and wages to staff.
(Primary source: Fair Work Ombudsman report; industry perspective: National Tertiary Education Union reports) - Construction and Trades — Industry unions report wage theft and underpayment of entitlements remain endemic in the building sector, with millions in unpaid superannuation and wages recovered for workers.
(Primary source: industry perspective: CFMEU reports)
Where to Get Help
- Fair Work Ombudsman (FWO): fairwork.gov.au
- Fair Work Commission (FWC): fwc.gov.au
- Legal Aid: Search Legal Aid [State] Free advice for eligible workers
- Community Legal Centres: Search clcs.org.au
- Australian Unions: Search unions related to your industry for support and representation
Prevention Tips: Protect Yourself from Wage Theft
Wage theft thrives in silence. The more workers who understand their rights and speak up, the harder it is for dodgy employers to get away with it.
- Know your rights — regularly compare your payslip against your award or enterprise agreement, including rates, entitlements, and super. For migrant workers or visa holders, see Fair Work guide about your rights. For some independent contractors or gig workers, check out regulated worker rights here.
- Track your hours — keep your own log of hours worked or use the Fair Work Record My Hours app.
- Check super quarterly — make sure contributions are appearing in your fund. Verify using super health guide from ATO.
- Talk to co-workers — share pay and conditions; pay secrecy clauses are illegal.
- Make a complaint — if something doesn’t add up, raise it with your employer or send anonymous tip-off to Fair Work Ombudsman.
Getting paid fairly isn’t a bonus. It’s your right under Australian law.
Pay secrecy is one reason wage theft thrives. When workers can’t discuss pay, underpayment is easier to hide.
Learn how pay transparency helps in our Ultimate Workers’ Guide to Pay Transparency in Australia (2025).
Disclaimer:
The information provided in this blog is for general informational purposes only and is not intended as legal advice. While we strive to ensure the accuracy and timeliness of the information, laws, regulations, and guidelines related to wage theft and underpayment may vary by jurisdiction and are subject to change. For specific legal concerns regarding wage theft or underpayment, we recommend consulting a qualified legal professional or reaching out to the Fair Work Ombudsman or other relevant authorities.