$49.5 Million, 8 Inspectors, Zero Prosecutions: Why a Senate Inquiry Is Now Asking What Happened to Australia's Criminal Wage Theft Laws

The Australian Government allocated $49.5 million to enforce criminal wage theft laws. It hired eight dedicated inspectors. It promised that employers who deliberately underpaid workers would face criminal prosecution for the first time in Australian history. Sixteen months later, not a single prosecution referral has been made.

That statistic is now the subject of a formal Senate inquiry, launched by Senator Fatima Payman on 1 May 2026. The inquiry has bipartisan support and intersects with the Booth Review into Fair Work operations, which is expected to deliver its report by mid-June. Together, these two processes could reshape how Australia enforces its wage laws.

Here is what the inquiry means, why it matters, and what you should know as a worker.

What are the criminal wage theft laws?

Criminal wage theft provisions came into force on 1 January 2025 under the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024. For the first time, deliberately underpaying workers became a criminal offence under federal law.

The key elements are:

• Who it targets: Employers who intentionally underpay wages, superannuation, or entitlements
• What it covers: Deliberate, systematic underpayment, not honest mistakes or payroll errors
• Maximum penalties: Up to 10 years’ imprisonment for individuals and fines of up to $7.8 million for corporations
• Enforcement body: The Fair Work Ombudsman (FWO), with referral to the Commonwealth Director of Public Prosecutions (CDPP) for criminal cases

The intent threshold is important. The law distinguishes between employers who make genuine errors and those who knowingly short-change their workers. Criminal prosecution is reserved for the deliberate category.

What has happened since the laws commenced?

In practical terms, very little. Despite $49.5 million in allocated funding and eight specialised inspectors, the FWO has not referred a single case to the CDPP for criminal prosecution as of May 2026.

This does not mean underpayment has stopped. The FWO’s own compliance data shows that more than half of all audited businesses are found to be non-compliant with workplace laws. Major cases continue to emerge. Southern Cross Care agreed to repay $11.7 million to 5,500 aged care workers in April 2026. Lambert Arria copped $140,000 in penalties for underpaying a single worker. The scale of the problem has not shrunk.

What has not materialised is the criminal enforcement that the laws were designed to deliver.

What is the Senate inquiry investigating?

Senator Payman’s inquiry is asking a direct question: why have zero prosecution referrals been made after 16 months of operation?

The terms of reference are expected to examine:

• Resource allocation: Whether the $49.5 million has been effectively deployed
• Inspector capacity: Whether eight inspectors are sufficient for a workforce of 14 million
• Referral process: Whether the threshold for criminal referral is too high in practice
• FWO capability: Whether the Ombudsman has the investigative tools and culture to pursue criminal matters
• Deterrent effect: Whether the absence of prosecutions undermines the purpose of the legislation

The inquiry has drawn bipartisan support, which suggests the concern extends beyond partisan politics. Both sides of Parliament expected the laws to produce visible enforcement outcomes, and neither has seen them.

How this connects to the Booth Review

The Senate inquiry is not happening in isolation. Former judge Michael Booth is currently conducting a broad review of the Fair Work Ombudsman’s operations, with a report due by mid-June 2026.

The Booth Review is examining the FWO’s overall effectiveness, including its approach to compliance, enforcement, and resource allocation. If the Review finds systemic issues with how the FWO operates, it could provide context for why criminal referrals have not occurred.

Two concurrent reviews examining the same enforcement gap create a real possibility of structural change. If both reach similar conclusions, the Government will face significant pressure to act.

What this means for workers

If you suspect you are being deliberately underpaid, the criminal wage theft laws technically give you a new avenue of protection. But the practical reality right now is that no employer has been criminally prosecuted under these provisions.

That does not mean the laws are worthless. Here is what you should understand:

1. Civil enforcement is still active. The FWO continues to pursue underpayment through civil proceedings, enforceable undertakings, and compliance notices. The penalties in civil cases are significant and continue to increase.

2. The criminal pathway exists but remains untested. If the Senate inquiry results in changes to how referrals are handled, criminal prosecution could become a genuine enforcement tool. The legislation is on the books.

3. Documentation strengthens every pathway. Whether your case ends up in a civil or criminal process, having clear records of your hours, pay, entitlements, and any communication with your employer puts you in a stronger position. Keep your payslips. Keep your rosters. Note any discrepancies.

4. You can still report suspected underpayment. The FWO accepts complaints from workers regardless of whether the matter is civil or criminal. Lodging a complaint creates an official record and can trigger an investigation.

5. The inquiry could change the enforcement landscape. If the Senate recommends lowering the referral threshold, increasing inspector numbers, or restructuring how the FWO handles criminal matters, the current gap between law and enforcement could narrow quickly.

What you can do right now

The most valuable thing any worker can do, regardless of what happens with this inquiry, is understand what you are owed. The gap between what workers are entitled to and what they actually receive remains one of the largest unresolved problems in Australian employment.

Start with your payslips. Check them against your Modern Award or enterprise agreement. Verify your penalty rates, overtime, superannuation, and any allowances. If something does not add up, you have options.

At Justiico, we help workers verify whether their pay matches their entitlements under the relevant Award. Our analysis takes minutes, not months, and it gives you the clarity to decide your next step, whether that is a conversation with your employer, a complaint to the FWO, or simply the confidence of knowing you are being paid correctly.

The criminal wage theft laws were a promise. The Senate inquiry is asking whether that promise has been kept. In the meantime, knowing your worth does not require waiting for Parliament to act.