FWO unveils crime-prevention code for small businesses

This voluntary code, aimed at protecting businesses from criminal liability under the Closing Loopholes legislation, is also being promoted as a useful resource for employers of all sizes.

Starting next year, deliberately underpaying workers will become a criminal offence and will be incorporated into the Commonwealth Criminal Code. To help businesses prepare, the FWO has released the Voluntary Small Business Wage Compliance Code (the Code), accompanied by a guide from the Ombudsman, made available yesterday. The guide provides practical advice, including a checklist, examples, and tips to help businesses ensure workers are paid correctly and address any payroll errors.

Key steps outlined in the checklist include:

• Identifying the relevant award or agreement;
• Ensuring workers are properly classified;
• Understanding potential changes to pay rates and entitlements;
• Adhering to pay slip and record-keeping requirements; and
• Staying informed about changes in workplace laws.

The FWO states that if an employer follows the guidelines in the code, it will not refer the matter for criminal prosecution or seek a cooperation agreement. However, other enforcement measures, such as compliance notices, enforceable undertakings, or civil litigation, could still apply. The guide clarifies that businesses aren’t required to meet every single factor in the Code to benefit from its protections. However, the FWO will evaluate compliance based on the overall circumstances and specific factors of each breach on a case-by-case basis.

A universal blueprint for employers

Fair Work Ombudsman Anna Booth, speaking at the Australian Labour Law Association’s National Conference last month, emphasised that in addition to shielding small businesses from criminal liability, the Code is designed as a simple, comprehensive framework for all employers. Describing it as a fantastic tool that will not only provide a code of conduct but also be supported by educational materials to guide businesses through the law.

Ombudsman Booth highlighted that the Code will serve as a blueprint for all employers in Australia, leaving no room for non-compliance excuses.

If any of this information has raised questions about the criminalisation of wage theft and what it means for your business or you have another workplace matter you need assistance with, please reach out to our friendly team for a confidential chat here.

About our author

Michal Roucek is a Partner and Solicitor at Citation Legal. Since 2009, he has worked exclusively in workplace and industrial relations law and is known as a safe pair of hands in dealing with complex workplace disputes and strategic litigation in the full suite of employment, workplace relations, industrial relations and executive level. Michal is an interest-based advocate recognised by both the business and union-employee communities as a conciliatory and innovative problem solver. He is focused on outcomes and solutions for clients.