Rules Mate

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Wage compliance code check

Since 1 January 2025, intentionally underpaying wages or entitlements is a criminal offence under the Fair Work Act. Small business employers (fewer than 15 employees) can rely on the Voluntary Small Business Wage Compliance Code as a safe harbour from criminal referral. This tool scores your reasonable steps and flags where your evidence falls short.

Last verified: 1 July 2026
Your business

Headcount is counted per person (including regular and systematic casuals), not full-time equivalents.

Reasonable steps

The Code treats these as evidence that an underpayment was not intentional. Answer honestly for your current practices.

Checked the correct award / agreement and classification

Confirmed the applicable modern award or enterprise agreement and each employee's correct classification level.

Kept wage rates up to date

Updated base rates, penalties and allowances after the annual wage review (1 July) and any award variations.

Used reliable payroll systems or tools

Used a reliable payroll system or the FWO Pay and Conditions Tool to calculate entitlements.

Sought information or advice

Got information from the Fair Work Ombudsman or advice from an accountant, bookkeeper, lawyer or industry association.

Kept correct pay records + issued payslips

Maintained accurate employee records and issued compliant payslips within one working day of pay day.

Took prompt corrective action on errors

Back-paid employees promptly and fixed the cause once an underpayment was identified.

Cooperated with the Fair Work Ombudsman

Engaged cooperatively with any Fair Work Ombudsman enquiry into the underpayment.

Reference tool — not legal advice. Whether conduct is intentional, and whether the Code is satisfied, depends on your specific facts. Civil underpayment liability applies regardless of the Code. Confirm your position with the Fair Work Ombudsman or an employment lawyer for material decisions.

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Frequently asked questions

When did wage theft become a criminal offence?
From 1 January 2025, intentionally underpaying employees' wages or entitlements is a criminal offence under the Fair Work Act (s327A). Company fines can reach the greater of three times the underpayment or about $8.25 million; individuals face up to 10 years' imprisonment and/or large fines. The offence targets intentional conduct — honest mistakes are not criminal.
What is the Voluntary Small Business Wage Compliance Code?
It is a Code declared by the Minister that gives small business employers (fewer than 15 employees) a safe harbour. If a small business complies with the Code in relation to an underpayment, the Fair Work Ombudsman must not refer the conduct for criminal prosecution. Compliance turns on the underpayment not being intentional, shown through reasonable steps.
What counts as reasonable steps under the Code?
Checking the correct award or agreement and classification, keeping wage rates up to date after the annual wage review, using reliable payroll systems or the FWO Pay and Conditions Tool, seeking information or advice, keeping correct pay records and payslips, taking prompt corrective action (back-payment) when an error is found, and cooperating with the Fair Work Ombudsman.
If I comply with the Code, am I off the hook entirely?
No. The Code only affects criminal referral. Civil liability for underpayments still applies regardless of intent — you must back-pay affected employees in full plus superannuation and interest, and civil penalties may apply. The Code is not a defence to civil claims.

Not sure which obligations apply to you?

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