Plain guide · Small business and the award

What the Small Business Wage Compliance Code actually requires

If you have heard that wage theft is now a crime and wondered where that leaves a small business like yours, this is the good news. There is a code built for you and following it keeps you on the right side of the line. Here is what it asks, in plain terms.

What the Code is

Since 1 January 2025, deliberately underpaying staff is a criminal offence in Australia. Alongside that law the government released the Voluntary Small Business Wage Compliance Code. It is a short set of expectations and it exists to give small business a clear path.

If you have fewer than 15 employees and you follow the Code, you are protected from criminal prosecution for underpayment. It does not ask you to be perfect. It asks you to take reasonable steps and to be able to show you did.

What it actually asks of you

The Code describes the kind of care a reasonable small employer takes with pay. In plain language, these are the steps.

Make a genuine effort to get the rates right. Work out the correct award, level and pay for your people, rather than guessing.
Keep up to date. Rates and rules change. The big one is the 1 July increase. What was right last year may not be right now.
Rely on accurate details. Base the pay on the real role, duties, hours and classification of each person.
Get advice from a reliable source. When you are not sure, ask someone who knows awards, not just a search box.
Give truthful information when you ask. Advice is only as good as what you tell the person giving it.
Fix a mistake promptly. If you find you have underpaid someone, correct it and back-pay the gap.
Cooperate with the Fair Work Ombudsman. If they ever ask, work with them openly.

The step that trips people up

Most of these are common sense. The one worth pausing on is getting advice from a reliable source. A free online rate calculator gives you a number. But it does not know your roster, it does not read your borderline classifications and it is not a reliable source standing behind the answer. The Code points to a qualified person, such as a professional HR or industrial-relations specialist. That is the difference between a guess and a step you can rely on.

Why it matters

Getting advice from a qualified person is one of the Code's steps and keeping the proof of it is what shows you followed the Code. A calculator on its own does neither.

How to meet the Code without becoming an expert

You do not need to learn the award system to follow the Code. The practical path is short. Get your pay checked against the award, fix anything that is off and keep a dated record that shows you took these steps. That record is the proof.

That is exactly what a Wage Compliance Check does. Someone with 25 years in industrial and employee relations places each role on the right level, tests the pay across your roster and gives you a dated record that lines up with the steps above. If you want the background first, our guide on whether your small business is at risk of wage theft charges sets out the law. Not sure an award even applies to you? Start with the free checklist.

This is general information to help you understand the Code. It is not legal advice. Following the Code protects against the criminal side only. Civil penalties for underpayment can still apply so getting the pay right still matters. Award rates change every 1 July.

Common questions

Who does the Code cover?

Businesses with fewer than 15 employees. If that is you, following the Code protects you from criminal prosecution for underpayment.

Does the Code make me immune from everything?

No. It protects against the criminal side. Civil penalties for underpayment can still apply so getting the pay right still matters. It is not legal advice.

What counts as a reliable source of advice?

The Code points to a qualified person, such as a professional HR or industrial-relations specialist. A free online calculator does not meet it on its own.

Do I have to lodge anything to be covered?

There is no form to file. You show you took the reasonable steps the Code describes and you keep the proof. A dated record of a check is that proof.

What if I find I have underpaid someone?

Fix it, back-pay the gap and keep a record that shows you acted promptly. That is one of the steps the Code asks for.

The relief is in the proof

Follow the Code and keep the proof you did.

A Wage Compliance Check does the steps for you and leaves you the dated record that shows you followed the Code. So you can stop second-guessing your pay and get back to your business.

Get a wage compliance check
or email ryan@carringtonworkforcerisk.com