The Fair Work Ombudsman recovered $358 million for more than 249,000 underpaid Australian workers in 2024-25, taking recoveries past $2 billion over five years. A Scale Suite analysis of FWO annual report data shows an average of roughly $1,438 back-paid per affected worker, record court penalties of $23.7 million in a single year, and an enforcement regime that changed permanently when intentional underpayment became a criminal offence on 1 January 2025.
Published: July 2026. Updated July 2026.
The FWO's 2024-25 annual report shows $358 million recovered for 249,000+ workers. The prior year, 2023-24, saw $473 million recovered for about 160,000 workers. The totals swing with the timing of large corporate remediations rather than tracking the underlying rate of underpayment: 2023-24 was inflated by several very large corporate back-payment programs, while 2024-25 spread smaller average amounts across far more workers. The through-line is the five-year total: more than $2 billion returned since 2020.
Where the 2024-25 money came from:
Court outcomes set records. Total court-ordered penalties hit $23.7 million, the highest in a single financial year, led by a $15.3 million penalty against the former Sushi Bay operators for deliberately underpaying 163 workers more than $650,000 and falsifying records. The FWO filed 73 new litigations.
One forward indicator worth watching: anonymous tip-offs jumped 50% to 25,608 in 2024-25, with workers aged 15 to 24 making up a third of reports. Detection is increasingly employee-initiated.
From 1 January 2025, intentionally underpaying wages, super or entitlements is a criminal offence under the Fair Work Act. The maximum penalties: for companies, the greater of three times the underpayment or approximately $8.25 million; for individuals, up to 10 years imprisonment or fines from $1.65 million (or three times the underpayment). Criminal liability can extend to people who aid the conduct, which brings payroll managers and advisors into scope.
Two safety valves matter for SMEs. The Voluntary Small Business Wage Compliance Code gives employers with fewer than 15 staff a pathway where genuine compliance efforts mitigate prosecution risk for honest mistakes. And employers who self-report can enter cooperation agreements with the FWO that take criminal referral off the table. The design intent is clear: the criminal regime targets deliberate conduct, but "we didn't know" only protects businesses that can show they tried to know.
Most underpayment in the FWO's caseload is not villainy; it is complexity meeting weak payroll controls. The recurring failure modes:
Annualised salaries that stop covering the award. A salary set three years ago that comfortably absorbed overtime and penalties can silently fall below the award floor after successive wage reviews. The 4.75% award increase from 1 July 2026 makes this the single most important payroll check of FY2026-27; our FY2026-27 wage cost report has the new floors [NOTE: link once live; interim link /resources/minimum-wage-australia].
Misclassification. Wrong award, wrong classification level, or casuals engaged as contractors. Run doubtful cases through the contractor vs employee cost calculator and see our classification checklist.
Allowances and loadings that lag wage rises. When base rates move, allowances often move too. Updating one and not the other is a classic partial-compliance failure.
Super on the wrong earnings base. Underpaid super is underpayment, and with Payday Super live from 1 July 2026, it surfaces per pay run rather than per quarter.
The common thread is that underpayment is a systems problem, and the fix is systematic: a payroll function that re-tests every employee against the current award floor after each wage review, documents the check, and reconciles wages, super and entitlements weekly. That is standard operating procedure inside a professional payroll and finance function, and our guide to what happens if payroll is done late in Australia covers the adjacent timing risks. To sanity-check your total wage exposure by team, use the team wage spend analyser.
The regulator's stated priority sectors: aged care services, agriculture, building and construction, disability support services, fast food restaurants and cafes, large corporates, and universities. If you operate in one of these, assume intelligence-led attention. The FWO's Employer Advisory Service also gave tailored written advice to more than 3,000 small businesses in the prior year, a channel worth using before a problem exists rather than after.
How much money did the Fair Work Ombudsman recover in 2024-25?
$358 million for more than 249,000 underpaid workers, bringing total recoveries to more than $2 billion over five years.
Is wage theft a criminal offence in Australia?
Yes. Since 1 January 2025, intentional underpayment of wages or entitlements is a criminal offence. Companies face fines up to the greater of three times the underpayment or about $8.25 million; individuals face up to 10 years imprisonment.
Can I go to jail for underpaying staff by accident?
The criminal offence requires intent. Honest mistakes remain civil matters, and small businesses (fewer than 15 employees) that follow the Voluntary Small Business Wage Compliance Code have a specific protection pathway. The protection depends on being able to show genuine compliance effort.
What was the biggest wage theft penalty in Australia?
The $15.3 million penalty ordered against the former operators of Sushi Bay outlets, for deliberately underpaying 163 workers more than $650,000 and falsifying records. It anchored a record $23.7 million in total court penalties in 2024-25.
Which industries have the most wage underpayment?
The FWO's priority sectors are aged care, agriculture, building and construction, disability support, fast food restaurants and cafes, large corporates, and universities. Large corporates alone accounted for about 60% of 2024-25 recoveries.
How is wage underpayment usually detected?
Increasingly by employees: anonymous reports to the FWO jumped 50% to 25,608 in 2024-25. Payroll data matching through Single Touch Payroll and, from 1 July 2026, Payday Super also surfaces discrepancies faster.
What should I do if I discover I have underpaid staff?
Quantify it, back-pay with interest and super, fix the control that caused it, and consider self-reporting. Self-reporting employers can enter cooperation agreements with the FWO that avoid criminal referral.
Why did recoveries fall from $473 million to $358 million?
The totals track the timing of large corporate remediation programs rather than the underlying rate of underpayment. 2023-24 contained several very large corporate back-payments; 2024-25 spread recoveries across 55% more workers at smaller average amounts.
Scale Suite is a Sydney-based provider of outsourced finance teams and fractional CFO services for Australian SMEs. We deliver weekly bookkeeping, payroll, BAS/IAS lodgement, cashflow reporting, management accounts, and strategic fractional CFO oversight, all as a fully embedded team that works inside your business.
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We review and check this guide periodically. At the time of writing (July 2026), all information was current. Scale Suite is a registered BAS Agent, not a licensed tax advisor or financial advisor. This content is general information only and does not constitute professional tax, financial, or legal advice. Some details may change over time.
Suggested citation: Scale Suite (2026), Wage Underpayment in Australia: The Data, scalesuite.com.au/resources/wage-underpayment-australia-data
Headline figures: the Fair Work Ombudsman recovered $358 million for more than 249,000 underpaid workers in 2024-25 (about $1,438 per worker), taking five-year recoveries past $2 billion; court penalties hit a record $23.7 million in a single year; from 1 January 2025 intentional underpayment is a criminal offence carrying up to 10 years imprisonment for individuals.
Methodology: Scale Suite analysis of Fair Work Ombudsman annual report data (2023-24 and 2024-25) and the Fair Work Legislation Amendment (Closing Loopholes) reforms, current at July 2026.
Scale Suite is a Sydney-based provider of outsourced finance and HR services for Australian SMEs. We deliver bookkeeping, financial reporting, payroll processing, fractional CFO support, recruitment, employee onboarding, people and culture support, and fractional HR oversight, all as a fully embedded team that works inside your business.
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