From 1 January 2025, intentionally underpaying employees will be a criminal offence in Australia. With fines reaching $7.8 million for companies and 10 years' imprisonment for individuals, businesses cannot afford to get it wrong.

The Fair Work Legislation Amendment (Closing Loopholes) Act 2023 puts compliance in the spotlight, making it essential for businesses to take proactive steps to protect themselves. For small businesses, the Voluntary Small Business Wage Compliance Code and supporting guide offer a clear framework to demonstrate compliance and protect against potential prosecution. This is where Complize can help.

As Australia’s leading RegTech solution, Complize offers tools to support businesses in maintaining accurate compensation documentation and audit readiness. This blog explores the changes, highlights the risks of non-compliance, and demonstrates how Complize can safeguard your business.

Understanding the New Criminal Underpayment Laws

The introduction of criminal penalties marks a critical change in Australia’s workplace compliance landscape:

• Intentional underpayment: Any deliberate action to underpay wages, entitlements, or allowances.
• Penalties for non-compliance:
  • For individuals: Up to 10 years' imprisonment or fines of $1.565 million.
  • For companies: Fines up to $7.825 million or three times the underpaid amount, whichever is greater.

While honest mistakes are excluded, businesses must act swiftly to fix errors once identified to avoid investigations and penalties.

Source: Fair Work Ombudsman: New Criminal Underpayment Laws

Why Businesses Need to Act Now

Failing to comply with the new laws can have severe consequences beyond financial penalties, including:

• Legal Risks: Criminal prosecution for deliberate underpayment.
• Reputational Damage: Loss of trust from employees, clients, and stakeholders.
• Operational Disruption: Investigations and enforcement actions disrupt daily business.

Businesses managing temporary visa holders or large, multi-tiered workforces face even greater complexity. Accurate documentation of compensation decisions and maintaining audit-ready records are critical steps to safeguard compliance.

How Complize Supports Your Compliance Needs

At Complize, we understand the challenges businesses face in navigating complex compliance requirements. While Complize does not currently track payroll compliance directly, our solution ensures businesses are prepared by enabling them to document compensation research and securely store these records for audit purposes. This functionality supports businesses in demonstrating their compliance efforts under the Fair Work framework.

Key Features of Complize That Support Compliance:

• Document Compensation Research:
  Complize helps businesses organise and securely store compensation research and related documents, ensuring records are readily available for audits or Fair Work inquiries.
• Audit-Ready Record Management:
  Ensure you have a clear, centralised record of compensation decisions to demonstrate compliance with Fair Work requirements.
• Workforce Compliance Tracking:
  Monitor and manage temporary visa holders and employee work entitlements to avoid breaches of Fair Work and immigration laws.
• Centralised Compliance Data:
  Complize consolidates workforce and compliance documents into a single platform, reducing the risk of missing or inaccurate records.

By focusing on documentation and audit readiness, Complize provides businesses with the tools to mitigate risks and respond confidently to compliance inquiries.

How to Prepare for the 1 January 2025 Deadline

To ensure compliance with the new criminal underpayment laws, businesses should:

• Document Compensation Research: Use Complize to organise and securely store evidence of compensation decisions and entitlements.
• Maintain Audit-Ready Records: Ensure all compensation-related documents are up to date and easily accessible.
• Review Employee Classifications: Verify that employees are correctly classified under relevant awards and agreements.
• Monitor Workforce Compliance: Track temporary visa conditions and entitlements to avoid inadvertent breaches.
• Stay Informed: Regularly review Fair Work updates and ensure your internal policies reflect the changes.

Why Choose Complize?

While tracking payroll compliance will be added as a feature in early 2025, Complize already supports businesses today by enabling them to document compensation research and securely store audit-ready records. This ensures businesses can confidently demonstrate their compliance efforts while preparing for the evolving Fair Work requirements. Highlighting our future payroll compliance capabilities, Complize remains committed to delivering proactive compliance solutions for Australian businesses.

• Workforce Management: Track employee compliance for visa holders and entitlements.

With Complize, businesses can demonstrate their commitment to compliance and avoid costly penalties under the new laws.

Conclusion

The new criminal underpayment laws place a heavy emphasis on accurate documentation and proactive compliance. Employers must act now to ensure compensation decisions are properly documented and audit-ready.

Complize provides businesses with a streamlined platform to manage compensation research and workforce compliance, empowering organisations to mitigate risks and protect their reputation.

Prepare for the January 2025 deadline with confidence. Book a demo with Complize today and see how we can simplify your compliance journey.

Verified Source:

• Fair Work Ombudsman: New Criminal Underpayment Laws Start 1 January 2025

About Complize Complize is Australia’s leading RegTech solution, simplifying workforce compliance by helping businesses organise and manage compensation research and audit-ready documentation.

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