Intentionally underpaying workers has been a crime in Australia since 1 January 2025, but no case has yet been sent to prosecutors. Fair Work Ombudsman Anna Booth told a Senate Estimates hearing this week that the regulator is yet to refer any criminal underpayment matter to the Commonwealth Director of Public Prosecutions, Workplace Express reported on Friday 30 October.
What the offence covers
The offence was introduced by the Closing Loopholes Act 2023. According to the federal government, it covers intentional underpayment of wages or entitlements and extends to most entitlements payable under the Fair Work Act or an instrument such as a modern award or enterprise agreement, including superannuation. It does not apply where underpayments are accidental, inadvertent or based on a genuine mistake, and carries potential penalties including imprisonment. The Ombudsman investigates and refers matters to the CDPP or the Australian Federal Police where appropriate.
Where the cases are
In its September 2026 response to a Senate committee report on wage theft, the government said the Ombudsman had set up a dedicated Criminal Investigations Branch and, since 1 January 2025, had assessed 62 matters for potential criminal investigation. There were six ongoing operations investigating suspected criminal offending, and another 24 matters under assessment. The government has funded the Ombudsman $49.5 million over four years, and $11 million a year ongoing, to run the new investigatory functions.
The independent statutory review of the Closing Loopholes laws, tabled on 20 August, concluded it was too early to judge the offence. According to the government’s summary, the review found the absence of prosecutions “does not mean that the measure is ineffective”, but reflects the early stages of implementation and the complexity of criminal enforcement. It recommended a targeted review of the offence within a year.
The critics
At a Senate inquiry hearing in May, AAP reported, independent senator Fatima Payman said: “This piece of legislation isn’t doing what it’s set out to do, and these are taxpayer dollars that have been spent and not really giving us an outcome that we were hoping for.”
Employers have pushed back from the other direction. Australian Security Industry Association chief Bryan de Caires told the same inquiry: “In the majority of cases, the underpayments are not deliberate, but arise from ambiguity in the system, contested interpretations and payroll system limitations.” The ACTU told the inquiry wage theft remained “widespread, entrenched and prevalent” in low-paid sectors.
What employers should take from it
A slow start is not a reason to relax. Criminal cases take time to build to the required standard of evidence, six investigations are active, and the civil penalty regime continues to run alongside the criminal offence. The line between a genuine mistake and an intentional underpayment will often be drawn from records, so accurate time sheets, payroll audits and prompt back-payment when errors are found remain an employer’s best protection.
Sources: Workplace Express (30 October 2026); Australian Government response to the Senate Education and Employment References Committee report on wage theft (September 2026); AAP (May 2026).