Employers and employees across Australia should educate themselves on the new Closing Loopholes workplace laws and make sure they are compliant, the Fair Work Ombudsman (FWO) 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.

On December, the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 received Royal Assent and certain key changes came into effect from 15 December 2023. While most changes started on 15 December 2023, 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.

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

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. 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.

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 results in a failure to pay on or before the money is due. This can include failure to make required superannuation contributions.

Companies prosecuted face penalties three-times the amount of the underpayment, if a court can determine it, or AUD 7.825 million (USD 5.13 million), whichever is greater. If the court can’t determine the underpayment, the maximum penalty is AUD 7.825 million (USD 5.13 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 AUD 1.565 million (USD 1.02 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,” Booth said.

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