The FWO isn’t slowing down when it comes to enforcing compliance

The Fair Work Ombudsman (FWO) is showing no signs of easing up on its mission to enforce workplace compliance. In July alone, its legal actions have unveiled a steady stream of businesses facing allegations of underpayments, exploitation of migrant workers, and poor employment record-keeping. Each case brings with it lessons that business owners can no longer afford to ignore. From hefty penalties to lasting reputational harm, the cost of non-compliance is rising steeply.

This article delves into the FWO’s recent activities and highlights why these legal battles should serve as a wake-up call for employers to tighten their compliance processes before it’s too late.

So, what has the Fair Work Ombudsman been up to?

In July this year, the FWO announced it had commenced legal action against a trove of businesses for underpayments, migrant exploitation, and incomplete employment records. These cases include:

• Fast-food restaurant Big Fat Greek in Belmore: this case involves the alleged underpayment of a migrant worker as a casual kitchen attendant at Big Fat Greek (Belmore) Pty Ltd. Employed between October 2021 and July 2022, it’s alleged that the worker was underpaid $11,974, including casual minimum wages, overtime, penalty rates, and a clothing allowance, as required under the Fast Food Industry Award. Despite being issued a Compliance Notice in October 2023, the company allegedly failed to rectify the underpayments.
• IT services company, D365.Group Pty Ltd: this case involves allegations of underpaying 16 IT consultants a total of $149,240 between October 2021 and December 2022. The underpayments reportedly include unpaid accrued annual leave, final wages, and termination entitlements, with individual shortfalls ranging from $4,581 to $23,749. Seven of the affected workers were visa holders, and the alleged breaches occurred across Sydney, Melbourne, and Brisbane.
• Shinya Geelong HR Pty Ltd and Shinya Torquay HR Pty Ltd: this case involves four employees, including three visa holders and one young Australian citizen, who worked as cooks and waitstaff between 2020 and 2023. The FWO claims the companies failed to pay minimum wages, weekend and public holiday rates, and accrued leave entitlements, as required under the Restaurant Industry Award 2020 and the Fair Work Act. The companies allegedly failed to address $9,195.68 in underpayments despite Compliance Notices, prompting the Ombudsman to seek court orders for back-payments, interest, superannuation, and penalties of up to $46,950 per company and $9,390 for their sole director.

The FWO is well on its way to exceeding last year’s $473 million total in recovered wages. Penalties in July alone have exceeded $164,000, including:

• $33,000 in penalties against AICA International Pty Ltd and $6,600 against its sole director and shareholder, Shiju Matthews, for breaching the Fair Work Act by failing to comply with a Compliance Notice requiring it to back-pay a full-time system and computer engineer it employed between February 2018 and July 2022.
• $44,000 in penalties against residential building and construction company, Kassiou Constructions Pty Ltd, and one of the company directors, Ilias Kassiou, for failing to comply with a Compliance Notice requiring the business to calculate and back-pay a full-time labourer employed by the company between 2012 and 2021.
• $7,042.50 in penalties against Brian Thomas Rundle, a sole trader who operated Porkys Garage, for failing to back-pay wages, including interest and superannuation, owing to a deaf apprentice employed between September 2022 and March 2023.

The FWO’s message hasn’t changed: when compliance notices are ignored and not followed, the FWO will continue to take legal action to protect employees and recoup their entitlements.

Wage theft is now a criminal offence

With the introduction of wage theft laws on 1 January 2025, intentionally underpaying employees is now a criminal offence in Australia, carrying severe penalties. Individuals can face up to 10 years’ imprisonment and fines of $1.65 million, while companies risk fines of up to $8.25 million or three times the underpayment amount. To ensure compliance, employers must implement robust payroll systems, conduct regular audits, and seek professional advice, as failing to do so not only invites legal risks but also erodes employee trust and damages reputations.

An underpayment mess is easier to prevent than to clean up. Regular payroll audits are a must

Preventing underpayment isn’t just about avoiding penalties – it’s an opportunity to build a stronger, more efficient organisation. By investing in payroll training, staying updated on legislative changes, and conducting regular compliance audits, businesses can turn potential vulnerabilities into strengths. These proactive measures not only demonstrate genuine compliance efforts but also foster trust and operational excellence.

Let us take care of the complicated stuff so you can get back to doing what you do best – running your business.

The team at Citation HR offers award-winning payroll compliance services. If you’re not 100 per cent confident with your payroll processes or award/agreement interpretation, get in touch via our 24/7 Advice Line.

Not a Citation HR client and need some advice on managing underpayment risks? The team at Citation HR can support your business on a range of workplace matters. Contact us today to arrange a confidential, no-obligation chat.