How Far Back Can You Claim Underpayment in Australia?
You can claim underpayment going back 6 years in Australia. Learn about limitation periods, evidence requirements, small claims, class actions, and the new wage theft criminal offence.
The 6-year limitation period
Under the Fair Work Act 2009, you have 6 years from the date of the underpayment to bring a claim in the Federal Court or Federal Circuit and Family Court. This means if your employer underpaid you in March 2019, you have until March 2025 to commence legal proceedings. The 6-year period applies to each individual pay period separately — so if you were underpaid continuously over several years, you can still claim for any underpayment that occurred within the last 6 years, even if earlier underpayments are now out of time. This limitation period applies to claims under the Fair Work Act, including breaches of Modern Awards, enterprise agreements, and the National Employment Standards. For claims under state legislation (such as long service leave underpayments in some states), different limitation periods may apply — typically also 6 years but check your state's specific legislation. The limitation period is paused (tolled) while you are making a complaint to the Fair Work Ombudsman, so time spent in the FWO complaint process does not count against your 6 years.
Small claims vs general claims
For underpayment claims up to $100,000, you can use the small claims procedure in the Federal Circuit and Family Court. This is designed to be accessible without a lawyer — the court uses informal procedures, the rules of evidence are relaxed, and costs are generally not awarded against the losing party (meaning you will not have to pay the employer's legal costs if you lose). Filing fees are modest (under $100 in most cases). For claims above $100,000, you must use the general federal court procedure, which is more formal and typically requires legal representation. However, many employment lawyers work on a 'no win, no fee' basis for underpayment claims, particularly where the evidence is strong. Union members can also access legal representation through their union at no additional cost. There is no upper limit on how much you can claim in the general procedure. Some of Australia's largest underpayment cases have resulted in back-pay orders of hundreds of millions of dollars.
Evidence you need to build your claim
Building a strong underpayment claim requires evidence of what you were paid versus what you should have been paid. The most important documents include your payslips (employers are legally required to provide itemised payslips within one working day of pay day), bank statements showing actual wages received, rosters and timesheets showing hours worked, your employment contract, the applicable Modern Award or enterprise agreement, and any correspondence with your employer about pay. If your employer did not provide payslips or kept poor records, the burden of proof can shift to the employer under the 'reverse onus' provisions introduced in 2021. This means if the employer cannot produce proper records, the court may accept the employee's reasonable estimates of hours worked and pay received. Keep a personal log of your hours if your employer does not keep accurate records — even notes on your phone or a simple spreadsheet can be valuable evidence. The Fair Work Ombudsman's Pay and Conditions Tool (PACT) can help you determine what you should have been paid under your award.
Interest and penalties on underpayment
When a court orders back-pay for underpayment, interest is typically awarded on the outstanding amount. The interest rate varies by jurisdiction but is generally in the range of 4-8% per annum, calculated from the date each underpayment occurred. This can add a significant amount to the total recovery, especially for long-running underpayments. In addition to back-pay and interest, the court can impose civil penalties on the employer. For ordinary contraventions, the maximum penalty is $18,780 per contravention for an individual and $93,900 for a corporation (as of 2024). For serious contraventions (deliberate, systematic underpayments), penalties can be up to ten times higher. Each underpaid pay period can constitute a separate contravention, so cumulative penalties can be enormous. The court can also order the employer to pay your legal costs in some circumstances, and can make orders requiring the employer to conduct an audit of all employees' pay to ensure others are not also being underpaid.
Wage theft is now a criminal offence
From 1 January 2025, intentional underpayment of wages is a criminal offence under the Fair Work Act following the passage of the Closing Loopholes legislation. This is a landmark change — previously, underpayment was only a civil matter. Under the new provisions, an employer who intentionally engages in wage theft can face criminal penalties including fines of up to $7.8 million for corporations and imprisonment of up to 10 years for individuals. The criminal offence applies to intentional conduct — the prosecution must prove that the employer deliberately underpaid the employee, not just that the underpayment occurred accidentally. Employers who self-report underpayments to the Fair Work Ombudsman and cooperate with rectification may access a 'cooperation agreement' pathway that avoids criminal prosecution. The criminal provisions are enforced by the Fair Work Ombudsman in consultation with the Commonwealth Director of Public Prosecutions. Victoria had already introduced state-based wage theft criminal offences in 2021, and Queensland in 2020, but the federal law now provides a nationally consistent framework.
FWO complaint vs private legal action
You have two main pathways to recover underpaid wages: lodging a complaint with the Fair Work Ombudsman (FWO), or taking private legal action. The FWO pathway is free — you lodge a complaint online, and the FWO investigates on your behalf. If the FWO finds that underpayment occurred, they will attempt to secure voluntary compliance from the employer (back-pay plus a compliance deed). If the employer does not cooperate, the FWO can take enforcement action in court. The drawback is that the FWO has limited resources and may prioritise some complaints over others — complex cases can take months or even years. Private legal action is faster and you control the process, but it may involve legal costs (though many employment lawyers work on contingency for strong cases). You can also do both: lodge an FWO complaint and pursue private action simultaneously. If you are a union member, your union can pursue the claim on your behalf at no cost. For large-scale underpayments affecting many employees, class actions are increasingly common — major class actions against retailers, hospitality chains, and franchises have resulted in recoveries of hundreds of millions of dollars.
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General information and estimates only — not legal, financial, or tax advice. Always verify with the Fair Work Ombudsman (13 13 94) or a qualified professional.
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