Paying your employees correctly is a fundamental obligation. The Australian Government has introduced the Voluntary Small Business Wage Compliance Code, making deliberate wage underpayment a criminal offence.
What Changed?
Under the new laws, employers who intentionally underpay their workers can face criminal prosecution — not just civil penalties. This applies to underpayment of wages, superannuation, leave entitlements and other employee benefits.
The Voluntary Small Business Wage Compliance Code
Small businesses that follow this code demonstrate good faith in paying their employees correctly. Following the code can provide a defence against criminal prosecution if an underpayment is found to be accidental rather than deliberate.
How to Protect Your Business
- Review all employment contracts and awards — make sure every employee is being paid correctly under their applicable Modern Award or Enterprise Agreement.
- Audit your payroll — run a thorough payroll audit to check base rates, overtime, penalty rates, allowances and super.
- Use compliant payroll software — platforms like Xero Payroll and QuickBooks Payroll are designed to calculate award rates correctly.
- Keep detailed records — document hours worked, leave taken and all payments made.
- Stay current on award changes — rates change annually. Make sure your system is updated every July.
Get a Payroll Health Check
Our payroll team can audit your setup, ensure you’re compliant with all Modern Award obligations, and get your STP reporting in order.
Learn about our payroll services or book a free consultation.