Major Employment Law Changes – Wage Theft, Penalties & Superannuation

Written By Drazen Kozaric

Effective Dates:

  • Wage Theft & Civil Penalties: 1 January 2025

  • Superannuation Changes: 1 July 2025 and 1 July 2026

1. Criminalisation of Wage Theft

From 1 January 2025, intentional wage theft is a criminal offence under the Fair Work Act 2009 (Cth).

An employer commits a criminal offence if they intentionally underpay employees amounts owed under the Fair Work Act, a Fair Work instrument, or a transitional instrument.

Maximum penalties include:

  1. Companies: The greater of $8.25 million or three times the underpaid amount

  2. Individuals: Up to 10 years’ imprisonment and/or the greater of $1.65 million or three times the underpayment

2. Increased Civil Penalties for Underpayments

Also effective from 1 January 2025, civil penalties for wage underpayments have been significantly increased.

For employers (excluding small business employers), the maximum penalties are now:

  • Standard contraventions: 1,500 penalty units

  • Serious contraventions: 15,000 penalty units

  • Alternatively, the greater of the above or three times the underpayment may be applied if sought by the applicant.

3. Superannuation Guarantee Changes

(a) Increase to Super Rate – From 1 July 2025, the superannuation guarantee (SG) rate will increase from 11.5% to 12%, completing the final step of the legislated SG increases.

(b) Introduction of ‘Payday Super’ –- From 1 July 2026, employers must pay SG contributions at the same time as wages are paid, rather than quarterly. This reform is intended to improve visibility of entitlements and streamline compliance.

4. Recommended Employer Actions

  • Review payroll systems and contracts to ensure full compliance with wage and superannuation obligations.

  • Conduct wage audits to identify and rectify any potential underpayments.

  • Begin preparing for Payday Super, including updating payroll processes and engaging software providers where necessary.

  • Train HR and finance teams on new compliance risks, especially around the criminal implications of wage underpayment.

Drazen Kozaric

Drazen was admitted to the legal profession in 2009 and brings a wealth of expertise to his role as Special Counsel at McCarthy Durie Lawyers in Brisbane. His practice spans a range of areas, including contract disputes, insolvency (acting for liquidators, directors, and creditors), estate litigation, debt recovery, negligence claims (representing both defendants and claimants), and building disputes.

Throughout his career, Drazen has worked with clients from diverse backgrounds, including small businesses, high-net-worth individuals, and national and international companies. He has managed highly complex, high-value matters and consistently delivers exceptional results. His extensive experience has equipped him with invaluable skills for handling intricate legal cases across multiple jurisdictions, including various State and Federal Courts and tribunals in Victoria, New South Wales, the Australian Capital Territory, and Queensland.

Drazen is dedicated to providing strategic, innovative, and cost-effective solutions while ensuring his clients are well-informed and fully advised on their legal positions and options.

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