Wage theft and unpaid super

What employers need to know

Paying employees correctly means managing wages, leave and superannuation. For small business owners juggling payroll and cash flow, regular checks can identify problems early.

Since 1 January 2025, intentionally underpaying wages or certain entitlements, including superannuation in applicable circumstances, can be a criminal offence.

When can an underpayment become ‘wage theft’?

The offence applies when an employer intentionally engages in conduct that intentionally causes a required payment to be unpaid or underpaid by its due date.

Honest mistakes are excluded from the criminal offence, but errors still need prompt investigation and correction.

The Fair Work Ombudsman can investigate suspected offences and refer matters for prosecution. Penalties can include fines and, for individuals, imprisonment. Exceptions apply, including superannuation for some employees.

Superannuation is a workplace entitlement

The Australian Taxation Office is the primary enforcement agency for compulsory super guarantee (SG) payments. Employees can complain to the ATO about unpaid super.

Super is also a National Employment Standards entitlement. Most employees covered by these standards can pursue unpaid super through court action, unless the ATO has already started proceedings concerning those contributions.

Certain employees, including some employed by sole traders and partnerships, are excluded from this NES entitlement. Super guarantee laws and award or agreement obligations may still apply.

Payment timing matters

From 1 July 2026, employers must pay super each payday. Contributions generally need to reach the employee’s fund within seven business days, with extensions in specified circumstances.

Late payments can attract the super guarantee charge and may breach workplace laws. Check that contributions reach the fund on time.

What protection is available for small businesses?

If the Fair Work Ombudsman is satisfied a small business has complied with the Voluntary Small Business Wage Compliance Code, it cannot refer the employer for criminal prosecution over the underpayment. Small business status alone does not provide protection.

Practical steps for employers

Build these checks into your payroll routine:

• Review classifications, pay rates and entitlements
• Check super calculations and delayed or rejected contributions
• Reconcile payroll records with payments
• Include wages and super in cash flow planning
• Investigate employee concerns and document corrections.

If you find an underpayment, establish its extent, seek advice on correcting it and fix the underlying process.

How Flor-Hanly can help you get it right

Flor-Hanly can help you review your payroll setup, check superannuation calculations and payment processes, and identify areas needing attention.

If you’re concerned about missed payments or want greater confidence in your systems, contact the Flor-Hanly team to discuss how we can help your business get it right.

Source: https://www.fairwork.gov.au/pay-and-wages/tax-and-superannuation