Fair Work Ombudsman Urges Compliance with Closing Loopholes Law Changes

Further regulatory information was released on the 15^th of January, this time from the Fair Work Ombudsman.

Employers and employees should educate themselves on the new Closing Loopholes workplace laws and make sure they are compliant, the Fair Work Ombudsman said.

Fair Work Ombudsman Anna Booth said there were important changes to the Fair Work Act that have been made or will be made by the laws, including the creation of a criminal offence for intentional underpayments.

“We urge workplace participants to be across the changes which create new or different rights or responsibilities,” Ms Booth said.

“There can be significant penalties where the laws are not followed – including jail time for the new criminal offence – but we want employers to get it right in the first place and are here to help with free information and advice to ensure they do.”

Most changes started on 15 December 2023, while others start between now and 2025.

Some of the changes affect the work of the FWO, while others affect the work of the Fair Work Commission, the national workplace relations tribunal.

Criminalising intentional wage underpayments

Starting not before 1 January 2025, intentional underpayments of wages by employers will be a criminal offence.

• Employers may commit an offence if they owe money to an employee under the Fair Work Act or an industrial instrument (like an Award or an enterprise agreement), and intentionally engage in conduct that fails to pay on or before the money is due.
• This can include failure to make required superannuation contributions.

• A Voluntary Small Business Wage Compliance Code will be established before the changes take effect, and compliance with this Code means a small business won’t be prosecuted if they underpay their employees.

Companies prosecuted face penalties three times the amount of the underpayment, if a court can determine it, or $7.825 million, whichever is greater. If the court can’t determine the underpayment, the maximum penalty is $7.825 million.

• Individuals can be imprisoned for up to 10 years; be fined either three times the amount of the underpayment, if the court can determine it, or up to $1.565 million, whichever is greater; or be both fined and imprisoned.

“Employers should know – these laws don’t apply to those who unintentionally underpay their employees or pay the wrong amount by mistake,” Ms Booth said.

The Fair Work Ombudsman will, once the offence takes effect in 2025, investigate suspected criminal underpayment offences.

Equal pay for labour-hire workers

• From 15 December 2023, employees, unions and host employers can apply to the Fair Work Commission for a regulated labour-hire arrangement order.
• When such an order is in effect, employers will be required to pay labour-hire employees the same as employees who are employed directly by the host employer.

• Under an order, they must be paid at least what they would receive under a host employer’s enterprise agreement, a workplace determination, an equivalent public sector determination and other prescribed instruments made under Commonwealth, State and Territory Laws.
• Any orders made by the FWC under these rules won’t come into effect before 1 November 2024.

The FWC can’t make an order if it’s not fair and reasonable. Several exclusions may also apply, for example, to host employers who are small business employers. The FWC can hear disputes about an order that can’t be resolved within the workplace. Further details are available via our website.

New discrimination protections

• From 15 December 2023, employers cannot discriminate by taking adverse action against employees because they have been subjected to family and domestic violence.

• Awards and enterprise agreements must also not include terms that discriminate against an employee because they’re experiencing (or have experienced) family and domestic violence.

For further information on these and other changes made by the Closing Loopholes laws, do visit the Fair Work website Closing Loopholes section. You can also subscribe to updates and stay across changes to the law via the FWO’s subscription centre.

For information on the new rules for fixed-term contracts

Employers and employees can also visit or call the Fair Work Infoline on 13 13 94 for free advice and assistance about their rights and obligations in the workplace.

An interpreter service is available on 13 14 50.