Wage underpayment investigation and remediation checklist
Wage underpayments are a growing regulatory priority. Intentional underpayment is now a criminal offence under section 327A of the Fair Work Act from 1 January 2025. This checklist is for Australian employment lawyers advising employers on investigation and remediation.
This is a 12-step checklist for investigating and remediating a wage underpayment under the Fair Work Act 2009 — covering scope, root cause, interest and super, voluntary disclosure to the FWO, and the new intentional wage theft offence from 1 January 2025.
The checklist
Identify the trigger and scope
Confirm the trigger — internal tip, FWO inquiry, or payroll review — and define the in-scope roles, sites, and period.
Issue a litigation hold and privilege plan
Preserve payroll data, rosters, emails, and timekeeping. Plan the privilege structure — often external lawyer led.
Map applicable awards and agreements
Identify modern awards, enterprise agreements, and contracts for each cohort across the investigation period.
Analyse the time and attendance data
Reconstruct hours worked using rosters, access logs, timesheets, and employee statements.
Calculate award entitlements pay period by pay period
For each pay period, calculate ordinary hours, overtime, penalties, allowances, leave loading, and public holiday pay.
Identify the root cause of underpayment
Isolate the cause — misclassification, system mapping, missed allowances, or annualised salary failure.
Calculate interest on the shortfall
Apply FWO interest policy or the Court rates on unpaid amounts for each pay period.
Calculate and fund the super guarantee shortfall
Calculate SG on the corrected OTE, SGC charge, and lodge the SG charge statement with the ATO.
Assess criminal wage theft risk
Review intent, systems, and governance against s 327A to assess criminal risk and plan a Voluntary Small Business Wage Compliance Code response if eligible.
Consider voluntary disclosure to the FWO
Weigh the benefits of a cooperative approach — enforceable undertaking or Compliance Notice — against litigation exposure.
Plan and execute the back-pay program
Communicate with affected employees, pay back amounts with PAYG withholding, and provide individualised statements.
Remediate systems and controls
Fix the root cause — update awards mapping, payroll systems, timekeeping, and train managers and payroll staff.
When this checklist applies
Use the moment an underpayment is identified or a FWO inquiry is received — before public disclosure or self-reporting.
Common pitfalls
- Missing award allowances (laundry, tool, travel) in the calculation
- Not recalculating super on the corrected OTE
- Underestimating the 6-year limitation period scope
- Public disclosure before legal privilege is set up
- Ignoring the new wage theft criminal offence from 2025
Run this checklist on a real matter
Quillio reconciles payroll to awards, runs pay-period calculations, and prepares the voluntary disclosure letter on a live matter. See /practice-areas/employment-lawyers or start a free trial.
General guidance for wage underpayment investigations. Adapt for franchised networks, labour-hire arrangements, and sector-specific underpayment orders.
Use this checklist on your matter.
Quillio can run this checklist on a specific NSW conveyancing matter — confirm each item, calculate adjustments, and generate the supporting documents. The free trial requires no credit card.
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