---
title: "Intentional underpayment of wages or entitlements can be a criminal offence - Sapience Financial"
description: "Understand the implications of intentional wage underpayment, the exceptions to the new law, and the Voluntary Small Business Wage Compliance Code."
url: "https://sapience.com.au/resources/small-business-alerts/intentional-underpayment-of-wages-or-entitlements-can-be-a-criminal-offence"
date: "2026-06-10T07:56:58+00:00"
language: "en-GB"
---

#  Small Business Alerts

##  Intentional underpayment of wages or entitlements can be a criminal offence

- [ small business ](https://sapience.com.au/all-tags/small-business)
- [ small business news ](https://sapience.com.au/all-tags/small-business-news)

#### Wages Theft and Criminal Prosecution for Business Owners

**From 1 January 2025, intentional underpayment of wages or entitlements can be a criminal offence. This doesn’t include honest mistakes.**

An employer may commit a criminal offence where they:

were required to pay an amount:

- to an employee such as wages or paid leave entitlements
- on behalf of the employee, or for their benefit, such as superannuation or a salary sacrifice arrangement

have intentionally done something that intentionally results in those amounts not being paid on or before the day they were due. The offence only applies to 'intentional underpayments' that happen after these provisions take effect. This includes where they’re part of a course of conduct that started before the provisions take effect.

#### Exceptions

These provisions don’t apply to certain employees for:

- superannuation contributions
- payment for taking long service leave payments
- payment for taking leave connected with being the victim of a crime
- payment for taking jury duty leave or for emergency services duties.

#### What is the Voluntary Small Business Wage Compliance Code (The Code)

The FWC cannot refer a small business employer’s conduct for possible criminal prosecution if they're satisfied that they’ve complied with the Code in relation to an underpayment.

A small business employer will comply with the Code if they don’t intend to underpay their employees. This will be assessed by looking at several factors. These factors aren’t new to compliant employers. Instead, they’re steps many already take as part of good business practice.

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