Wage Theft and Labour Hire Exploitation: What's Still Going Wrong in 2026

Since 1 January 2025, intentional underpayment of employees has been a criminal offence under the Fair Work Act. The penalties are severe:

• Individuals: up to 10 years imprisonment and/or fines of the greater of 3 times the underpayment amount or $1.65 million
• Corporations: up to $7.85 million or 3 times the underpayment, whichever is greater

The Fair Work Ombudsman investigates suspected wage theft and refers serious cases to the Commonwealth Director of Public Prosecutions or the Australian Federal Police for criminal prosecution.

In 2023-24, the FWO recovered $473 million in unpaid entitlements. Over half of that — $333 million — came from large corporates. These are not small-time operators. Woolworths, Coles, major universities, and hospitality chains have all been caught underpaying workers in recent years.

The criminal laws add a new dimension: executives who knowingly authorise or permit underpayment now face personal criminal liability. This is no longer just a fine the company absorbs — it's a prison sentence.

The Same Job Same Pay laws took effect on 1 November 2024, requiring labour hire workers to be paid at least the same rate as direct employees doing the same work under the host's enterprise agreement.

The intent was straightforward: stop companies using labour hire to undercut their own workers' pay. But in practice, loopholes are already being exploited.

The Mining and Energy Union (MEU) has identified several tactics companies are using to avoid the laws:

• Restructuring labour hire as "service contracts" — by characterising the arrangement as a service rather than labour hire, companies argue the Same Job Same Pay provisions don't apply
• Using traineeships to pay less — enrolling labour hire workers in traineeships to justify lower pay rates, even when the worker is doing the same job as a fully qualified direct employee
• Complex corporate structures — creating layers of related entities to obscure the employment relationship and make it harder to identify who the "real employer" is

If you're a labour hire worker and you believe you're being paid less than direct employees doing the same work at your host company, you may have grounds for a regulated labour hire arrangement order through the Fair Work Commission.

Some of the worst wage theft in Australia targets migrant workers — and the problem is getting worse, not better.

In January 2026, the Australian Border Force conducted raids in Far North Queensland, detaining figures involved in the exploitation of migrant workers. The case involved PALM scheme workers (Pacific Australia Labour Mobility) being exploited through illegal cash-in-hand arrangements and overcrowded accommodation described by authorities as conditions of modern slavery.

Separately, Sanders Apples in Victoria's Yarra Valley is facing court action in March 2026 for allegedly sourcing workers from an unlicensed labour provider — a region notorious for exploitation of seasonal fruit-picking workers.

Migrant workers are disproportionately targeted because:

• Many are on visas tied to their employer, making them afraid to report exploitation
• Language barriers make it harder to understand entitlements
• Geographic isolation (particularly in agriculture) limits access to support services
• Some are undocumented, which exploitative employers use as leverage

Critically, every worker in Australia has the same minimum employment rights under the Fair Work Act, regardless of visa status. Reporting wage theft to the Fair Work Ombudsman will not trigger visa cancellation — the FWO has an explicit protocol with the Department of Home Affairs to protect workers who come forward.

The criminal wage theft laws include two key safe harbour provisions that employers can use to avoid criminal referral:

1. Voluntary Small Business Wage Compliance Code: small businesses that follow this code are shielded from criminal prosecution referral. The code requires genuine efforts to comply — it's not a blanket exemption, but it provides a pathway for small employers who make honest mistakes.

2. Self-reporting and cooperation agreements: employers who self-report underpayments to the Fair Work Ombudsman can enter into a cooperation agreement. While under a cooperation agreement, the FWO will not refer the employer for criminal prosecution.

This creates a clear incentive: if you're an employer and you discover you've been underpaying staff, self-report immediately. The alternative — waiting until the FWO finds it — now carries criminal liability.

For employees, this also matters: if your employer enters a cooperation agreement, they've essentially admitted to underpayment. You are owed every dollar, plus interest, and the FWO will oversee repayment.

If you suspect you're being underpaid, here's what to do:

• Check your pay: use the Fair Work Ombudsman's Pay and Conditions Tool (PACT), or our Underpayment Checker, to calculate what you should be earning under your award or enterprise agreement
• Keep records: save every payslip, roster, timesheet, and employment contract. Screenshots of text messages and emails from your employer are also valuable evidence
• Raise it with your employer first: many underpayments are genuine errors (incorrect award classification, missed penalty rates). A written request often resolves it
• Lodge a complaint with the Fair Work Ombudsman: if your employer doesn't fix it, lodge a formal complaint at fairwork.gov.au or call 13 13 94. The FWO investigates at no cost to you
• Contact your union: if you're a union member, your union can represent you in disputes and, in some cases, conduct workplace inspections
• Know the time limit: you can claim underpayments going back 6 years under the Fair Work Act. Don't assume old underpayments are lost

Use our tools below to check your pay, calculate what you're owed, and understand your rights.