What constitutes an underpayment? 


The Australian Government, through Fair Work Australia, sets a national minimum wage. In addition to this, there are 122 different modern awards which outline terms of employment based on different roles/duties across different industries. Other companies have Registered Enterprise Agreements which dictate the terms of employment. 

As a Business Owner you first need to be aware of the relevant instrument under which your employees are engaged. You then need to make sure you pay all wages, penalty rates and allowances as outlined in that instrument.  

Whenever you take on a new employ, you need to

It is important to note also, that as things change, this can mean an employee’s classification/wages etc might need to change.    Call HR Central and we can go over it all with you 1300 717 721

These changes include; 

What happens if you underpay? intentionally or non-intentionally? 

Fair Work sends out information frequently highlighting the fines it has imposed on businesses who have underpaid. In these cases, the companies and directors personally receive these fines. 

 In the case you make a mistake, as soon as you realise, you need to; 

  • Work out how long the employee has been underpaid 
  • Work out how much the employee was actually paid
  • Work out how much the employee should have been paid 
  • Calculate how much the employee has been underpaid 
  • Backpay the employee
  • Keep up-to-date with future wage increases 
  • HR Central can help you calculate and work out how to manage all of this for you 1300 717 721

 Can I be dobbed in for underpayment by an employee and if so can that employee be anonymous (whistle blowing)?

 Short answer. Yes. 

 Steps to put in place to prevent underpayments

  • Create Position Descriptions 
  • Do award interpretation on position 
  • Confirm rates of pay for different hours worked (Ordinary Hours, Overtime, Weekends, Public Holidays etc) 
  • Track hours worked correctly (maintain records) 
  • Stay informed of changes to awards/rates 
  • Monitor duties and other changes 

HR Central can help you with any of the above to ensure that your business is not at risk of underpayments.  It always pays to check!  1300 717 721



Sarah Tidey

Sarah Tidey is a former lawyer who specialises in HR and workplace dispute resolution.

Related Posts