Preparing your business for the year ahead: The recent employment law changes all businesses need to be aware of
We have seen a number of significant employment law changes come into effect over the past few years affecting businesses – and there are a lot more to come!
We have set out a brief summary of all of the 2025 changes which businesses need to be aware of moving into the new year.
Criminal Wage Theft
Since 1 January 2025, wage theft has been criminalised under the Fair Work Act 2009 (Cth) (“Fair Work Act”), which means that employers are guilty of a criminal offence if they intentionally underpay their employees amounts they are owed (i.e. they fail to pay wages or other benefits, such as superannuation, as required under the Fair Work Act or an industrial instrument).
Maximum penalties include:
the greater of $8.25 million or three times the underpayment amount for companies; and
up to 10 years imprisonment and/or the greater of $1.65 million or three times the underpayment amount for individuals.
Increase to Civil Penalties
Since 1 January 2025, civil penalties for wage underpayments have also increased for non-small business employers (i.e. with 15 or more employees) so that the maximum penalty (in certain circumstances) can be the greater of three times the value of the underpayment or the relevant penalty amount for the contravention.
Voluntary Small Business Wage Compliance Code
A Voluntary Small Business Wage Compliance Code (“Code”) has been released, along with guidance from the Fair Work Ombudsman to help small business employers (i.e. with fewer than 15 employees) take steps to pay their employees correctly and understand and access the protections of the Code in their business.
Importantly, the Fair Work Ombudsman cannot refer a small business employer for criminal prosecution if they are satisfied that they have complied with the Code – so this is a really good tool for small businesses to use to minimise risk.
It is relevant to keep in mind that:
A small business employer will be considered to have complied with the Code if they do not intend to underpay their employees.
This will be assessed by looking at several factors (which should not be new to compliant employers as they are steps many already take as best practice). These include, taking reasonable steps to determine correct pay and making an effort to stay informed about workplace law changes.
The Fair Work Ombudsman has made it clear that the Code is not a checklist. This means that a small business employer does not need to show they meet all the factors. There is also not one factor that must be met to have complied with the Code.
Where an underpayment has occurred, the Fair Work Ombudsman have advised that they will look at the overall picture and the business’ particular circumstances to determine whether the Code has been satisfied.
You can access the Code and Guide here:
Code: https://www.legislation.gov.au/F2024L01635/asmade/text
Fair Work Commission New Powers
On 26 February 2025, the Full Bench of the Fair Work Commission will be able to establish model terms (covering flexibility, consultation, and dispute resolution). These model terms can be adopted in enterprise agreements by parties if they choose to do so.
Casual Conversation
On 26 February 2025, the new “Employee Choice Pathway” (which replaces the existing casual conversion scheme), becomes available for most casual employees (except small business employees who this is available to from 26 August 2025).
This pathway allows eligible casuals to notify their employer in writing of their intention to change to permanent employment (which an employer can only refuse for certain reasons).
Unfair Deactivation/Termination
From 26 February 2025, the Fair Work Commission will be able to accept applications from eligible persons for unfair deactivations or unfair terminations of contracts (which supports changes introduced to the regulation of road transport contractors and “employee-like” workers).
Sexual Harassment and Sex or Gender Based Discrimination
As part of recent changes in Queensland promoting proactive management of sexual harassment and sex or gender-based discrimination, from 1 March 2025, persons conducting a business or undertaking must prepare and implement a prevention plan to manage identified risks to the health and safety of workers, or other persons, from sexual harassment or sex or gender-based harassment at work.
The obligation to prepare a prevention plan applies where a risk of sexual harassment has been identified, and control measures are needed to eliminate or minimise the risk.
Superannuation
From 1 July 2025, the minimum superannuation guarantee rate will increase to 12% which will be the last of the incremental changes that we have seen occur.
Anti-Discrimination
As a result of changes to Queensland’s Anti-Discrimination Act, from 1 July 2025, businesses, organisations and government agencies will have a positive duty to prevent discrimination, rather than respond to problems after they occur. There will also be new protected attributes and other changes, including to the definitions of direct and indirect discrimination.
Right to Disconnect
From 26 August 2025, the right to disconnect will extend to small business employees giving them the right to refuse to monitor, read, or respond to contact, or attempted contact from their employer (or third parties related to their work) outside of the employee’s working hours, unless their refusal is unreasonable. For other employees of non-small businesses this change took effect on 26 August 2024.
Wage Increases
The Fair Work Commission reviews the National Minimum Wage and minimum award rates of pay each year as part of the Annual Wage Review (“AWR”). The AWR usually happens between March and June and any changes generally come into effect on 1 July.
Seeking Further Advice
If you would like specific advice about these changes or have any questions about how these changes may impact your business and what you can do to ensure compliance, please get in touch with our Employment and Industrial Relations Law Team - https://www.mckayslaw.com/employment-industrial-relations-law