The start of 2025 brings with it wage theft laws under the Fair Work Act. The Fair Work Ombudsman has released a guide to the voluntary code for small businesses.
This guide has also been declared a blueprint for employers of all sizes seeking to protect themselves from criminal liability under Closing Loopholes wage theft provisions from January 1.
Wage theft is the intentional underpayment of wages and entitlements which is now a criminal offence.
Compliance Assessment
The code goes to the relevant matters that the FWO must consider in assessing compliance, such as:
- efforts an employer has made to keep up to date the information that it has relied upon,
- the degree of authority and the source of that information,
- the belief that they have about the accuracy of that information and
- the steps that they’ve taken if they’ve discovered underpayments.
The guide offers practical advice and tools such as a checklist, examples and tips for ensuring they are paying workers correctly and for fixing errors.
Steps spelt out in the checklist include finding the relevant award or agreement, ensuring workers are correctly classified, finding out what might change their pay rates and entitlements, following pay slip and record-keeping obligations, and staying up to date with workplace laws.
If an employer “satisfies the code”, the FWO says it cannot refer their conduct for possible criminal prosecution or enter into a cooperation agreement.
It can still consider other enforcement options, however, such as compliance notices, enforceable undertakings or civil litigation.
The guide says small businesses do not have to, “check off every factor in the code to get the benefit of the code, and no one factor is critical“.
The FWO says it will instead, “look at the overall picture and the business’ particular circumstances where an underpayment has occurred to determine whether the code has been complied with“.
The Fair Work Ombudsman’s goal is in addition to being a code, it will also have a lot of educational materials accompanying it.
Key Links
Below are some useful links for employers seeking to access the code and assess whether they are sufficiently meeting their obligations.
Voluntary Small Business Wage Compliance Code Declaration 2024
MEA’s Recommendations
It is the recommendation of MEA that now more than ever employers focus on ‘records, records, records’ as the WR team can commonly be heard chanting.
Where workers take an afternoon off on leave – have a leave record with their timesheet for that pay cycle.
If you are looking for examples of timesheets and leave forms the WR team can provide you with these; so that you can assess against your own systems.
Should you wish to discuss further, contact the Workplace Relations Team on 1300 889 198.
