The TTIA’s Brian Beecroft clarifies key aspects of the Voluntary Small Business Wage Compliance Code.
Tree contractors may be unaware of the details of the introduction of the Voluntary Small Business Wage Compliance Code on January 1, 2025. This Code is for small-business employers who have fewer than 15 employees. It is not for larger businesses, independent contractors, or hirers of regulated workers.
What is the Code?
The Code is a legislative instrument created under the Fair Work Act. Its purpose is to help small business employers avoid criminal prosecution if they didn’t intentionally underpay their workers. The Fair Work Ombudsman (FWO) can’t refer a small business for criminal prosecution under the criminal offence if the business can satisfy the FWO it has complied with the Code.
TTIA has previously circulated notification that from January 1, 2025, an employer intentionally underpaying an employee can be subject to criminal prosecution. This may include:
• Not paying sufficient wages, including penalty rates, overtime rates and allowances (or not paying them at all);
• not paying amounts required by the applicable award or enterprise agreement; and
• not paying other entitlements, for example superannuation for some employees.
If a person is convicted of a criminal offence, a court may impose a maximum of 10 years in prison for an individual. The court can also impose penalties for the individual or a company, or both.
Maximum penalties
If the court can determine the underpayment amount, the maximum penalty for a company will be the greater of:
• Three times the underpayment amount; or
• $8,250,000.
If the court can’t determine the underpayment amount, the maximum penalty is $8,250,000.
If a court can determine the underpayment amount, the maximum penalty for an individual will be the greater of:
• Three times the underpayment amount; or
• $1,650,000.
If a court can’t determine the
underpayment amount, the maximum
penalty is $1,650,000.
The criminal offence does not apply for underpayments that happen because of a genuine mistake.
A copy of the Code is available from TTIA – email ttia@ttia.asn.au. Tree contractors are reminded TTIA provides an in-house wage and payroll audit service by qualified staff. Contact TTIA to arrange a payroll audit which will be conducted in a confidential manner, and any action plan as a result will be formulated between TTIA and our member. This service is available in all states.
For more information on TTIA visit ttia.asn.au or phone (02) 9264 0011.