Wage theft and casual underpayment: what changed, what to check.
Since 1 January 2025 intentional underpayment of wages can be a criminal offence in Australia. Most underpayment of casual workers is not intentional. It is a classification one grade too low, an allowance that was never switched on, a minimum engagement paid short, or a penalty stream from the wrong award, and it looks correct on the payslip. This page says what changed, what the regulator reports, and what to check, with the authority linked on every point.
Last reviewed 3 September 2026 · sources: Fair Work Ombudsman
What changed, and when
1 January 2025. Amendments to the Fair Work Act made it a criminal offence for an employer to intentionally underpay wages or entitlements. The Fair Work Ombudsman says honest mistakes are not captured, and that it decides whether a matter is referred for prosecution. Maximum penalties are expressed as imprisonment for an individual and as penalty units or a multiple of the underpayment, so the dollar figures move each 1 July and are not restated here: Fair Work Ombudsman: criminal prosecution ↗. Dated entry: what changed and when →
1 January 2025. The Voluntary Small Business Wage Compliance Code, for employers with fewer than 15 employees, was published the same day. The Ombudsman says it cannot refer a compliant small business employer for possible criminal prosecution, and that any employer can ask about a cooperation agreement: Fair Work Ombudsman: the Code and cooperation agreements ↗.
26 August 2024 and after. The definition of a casual employee changed, and an employee choice pathway to permanent employment opened in 2025. Both bear on whether a person is being paid as the right kind of employee at all: Fair Work: casual employment changes ↗.
What the regulator reports
The Fair Work Ombudsman reports recovering $358 million for more than 249,000 underpaid workers in 2024-25, bringing back-payments to more than $2 billion over the five years to 2024-25, with about 60% of the year’s recoveries coming from large corporate employers. Court penalties are reported separately from recoveries. Read the figures at the source rather than in a summary: FWO annual report 2024-25 media release, 29 October 2025 ↗.
Where a casual payslip goes wrong
These are mechanics, not accusations, and every figure comes from MyGig’s State of Casual Pay 2026 report, derived from the award engine and the Fair Work award library rather than a survey.
- The classification is one grade low. Inside a single award the published casual ladder spans a median of $7.70 an hour from the entry classification to the top published row. A worker graded below the duties they actually perform is underpaid by several dollars an hour, every hour, on a payslip that looks right.
- An allowance that can apply was never switched on. 1,588 allowance rows sit across the awards with published casual rates, under 1,077 distinct names; only 17exclude casuals in the award’s own words and 1,530 say nothing either way. Silence is not exclusion: the clause decides.
- A short engagement paid as worked. 66 of 114 awards state a minimum engagement in a clause the extractor could cite, most often three hours, and 15 of those sentences carry an exception. A two-hour call-in under a three-hour minimum is paid at three, if the clause applies.
- The penalty stream comes from the wrong award.Across the awards on MyGig’s shift calculator, Sunday multipliers on the casual rate run from 1.2x to 2x and public holidays from 2x to 2.5x. Entry casual rates themselves span $31.53 to $49.29. Coverage by the wrong award moves every one of those numbers.
What to check
Seven questions, each answered by the award or the regulator rather than by this page:
- Which award covers the work? Coverage clauses decide, and more than one award can be in play at one site. Fair Work’s pay and wages section is the starting point.
- Which classification matches the duties actually performed? Not the title on the contract. The classification schedule of the award describes the work at each level.
- Which allowances are triggered? First aid, meal, vehicle, laundry, tool and site allowances each have a trigger in the clause. An allowance that can apply is not one that will apply.
- Is there a minimum engagement? And does the sentence carry an exception? The award’s own words are on MyGig’s award guides with the clause number, and in the award itself.
- Are Saturday, Sunday, public holiday and overtime streams from the same award? Penalty rates are award-specific and overtime thresholds differ.
- Is superannuation calculated on the right base and paid on time? From 1 July 2026 Payday Super changes both the earnings base and the deadline; the ATO is the authority.
- Are the records and payslips what Fair Work expects? Fair Work sets out record-keeping and payslip requirements.
Authorities: Fair Work: pay and wages ↗, ATO: about Payday Super ↗, and the awards themselves on the Fair Work award library ↗. Current casual rates by award are on MyGig’s award guides.
If MyGig employs your casuals
When MyGig is the Employer of Record, MyGig employs the worker and pays under the award, with the award, classification and allowances resolved by the engine when the shift is posted and the clause cited on every priced hour. Workers are paid the day after every shift, so a wrong rate surfaces in a day rather than a quarter. How the engine works is on compliance; the dated record of rule changes is on what changed and when.
Questions
Is an honest payroll mistake wage theft?
Not under the criminal offence as Fair Work describes it. The Fair Work Ombudsman says the offence introduced on 1 January 2025 applies to intentional underpayment, and that honest mistakes are not captured. Underpayments still have to be found and fixed, and civil penalties can still apply; the Ombudsman’s pages set out both.
What is the Voluntary Small Business Wage Compliance Code?
A code published alongside the criminal offence for employers with fewer than 15 employees. The Fair Work Ombudsman says it cannot refer a small business employer’s underpayment for possible criminal prosecution where it is satisfied the employer complied with the Code, and that any employer can ask about a cooperation agreement. Read the Code on the Ombudsman’s site rather than a summary of it.
What should a business do if it finds an underpayment?
Fair Work publishes guidance on working out what is owed and paying it back, and on when and how to contact the Ombudsman. This page does not tell you what your obligation is; it tells you where the regulator does. Check your own award, agreement and circumstances with Fair Work before acting.
Does using an Employer of Record remove the risk?
It moves the employment relationship. When MyGig is the Employer of Record, MyGig employs the worker and is the party paying under the award, with the clause cited on every priced hour. Host duties such as workplace health and safety remain with the business the worker attends, and Safe Work Australia is the authority on those.
General information, not legal advice. Written by Enguerrand Vidor, Founder & CEO, MyGig; regulator links reviewed 3 September 2026. Your award, agreement and circumstances change the answer, so check your own position with Fair Work ↗ before acting.
Pay the award’s words, not a guess.
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