Changes to Australian wage theft laws

On 1 July 2021, Victoria became the first state in Australia to make wage theft a criminal offence. This was put into place to address widespread underpayment of employees and to send a clear message to employers that wage theft would not be tolerated.

However, as of 1 January 2025, a new FEDERAL wage theft offence is in effect under the Fair Work Act 2009 (Cth) (FW Act). Because these federal laws cover the same ground and are stronger, the Victorian government is planning to scrap its own wage theft law. The reason is straightforward: when federal and state laws clash, federal law wins.

What is wage theft?

Wage theft occurs when employers deliberately withhold wages and entitlements such as superannuation, or underpay employees. While some underpayments are accidental, wage theft refers to conduct that is intentional or dishonest. It typically affects industries with casual workforces and lower-skilled roles, but no business is immune.

How does the new federal law work?

The new federal wage theft law means:

All businesses across Australia must pay employees properly and on time.
If employers intentionally underpay their staff, they risk huge fines (over $8 million for businesses) or even jail (up to 10 years for individuals).
The main watchdog is the Fair Work Ombudsman (FWO), who investigates wage theft and can refer serious cases to the police.

There are some protections for small businesses that follow a government-approved code and work with the FWO if they discover a mistake.

Why is Victoria scrapping its own law?

Since the new federal rules are now in place nationally and are even stricter and clearer, Victoria’s wage theft law is no longer needed. Legally, federal laws override state laws when they clash and Victorian businesses must now follow the new national rules.

What should employers do?

If you’re running a business in Victoria, you must:

Make sure you’re paying all wages, superannuation, and entitlements correctly and on time.
Keep accurate payroll and wage records.
If you find a mistake, fix it straight away and tell your employees.
Consider reporting any wage issues to the Fair Work Ombudsman.
If you’re unsure about what you need to do, get advice from a legal, HR, or payroll expert.

What about employees?

If you’re an employee, know your rights! If you think your employer is not paying you correctly, you can report it to the Fair Work Ombudsman.

This national change is important for every business. Understanding your obligations – and making sure you meet them – is the best way to protect your business and your employees.

If you have questions about wage payments or compliance, get in touch with our team.

This is general advice only and has not been prepared with your situation and needs in mind. For individual and personalised advice, we highly recommend that you seek out proper professional advice from your lawyer or business advisor.