Recent Fair Work Ombudsman (FWO) enforcement action highlights a clear and growing risk for employers: underpayments and poor record keeping in Australia remain some of the most common — and costly — compliance failures.
Across multiple Federal Court outcomes in December 2025, businesses were penalised for breaches involving wages, payslips, and employment records. These cases reinforce a critical point — compliance is no longer just about paying staff correctly, but about proving compliance through accurate systems and documentation.
What’s Going Wrong?
Recent Fair Work cases reveal recurring compliance gaps across Australian businesses:
- Underpaid wages
- Incorrect pay calculations
- Missing or inaccurate records
- Non-compliant payslips
While these issues are not new, regulators are increasingly treating them as serious legal breaches rather than administrative errors.
Case Spotlight: Fair Work Underpayment Cases in Australia
Carpentry business operator penalised
- A Melbourne sole trader (Ben Gilling, trading as Benaya Building Group) was penalised for failing to comply with a Compliance Notice.
- The breach involved underpaying a young apprentice (aged 16–17), including unpaid wages, overtime, and leave.
- The Court imposed $5,071 in penalties and ordered $4,151 in back-pay plus super and interest.
- The failure to comply was found to be deliberate, despite multiple opportunities to rectify the issue.
Former automotive service operator penalised
(Fajloun Motor Group Pty Ltd – Ultra Tune Yagoona)
- The company was hit with a $135,000 penalty for breaching workplace laws.
- Key issues included:
- Failure to comply with a Compliance Notice
- Inaccurate pay slips and poor record-keeping
- Underpayment of a casual employee (minimum wages, penalty rates, overtime)
- The worker was only back-paid after legal action commenced, highlighting serious non-compliance.
- The case reinforces that record-keeping and pay slip obligations are strictly enforced.
Penalties for Pether and Rattana matter
- Two individuals (Pether and Rattana) were penalised for serious workplace law breaches, including:
- Underpayments
- Record-keeping failures
- Failure to comply with Compliance Notices
- The case involved vulnerable workers, with the Court imposing penalties to deter similar conduct.
- It highlights the Fair Work Ombudsman’s focus on enforcing compliance where employers ignore regulatory directions.
Why Record-Keeping Matters as Much as Pay
Under Australian workplace laws, employers must not only pay employees correctly but also:
- Keep accurate and complete records
- Provide compliant payslips
- Demonstrate compliance if required
Without proper records, employers are exposed.
In many Fair Work investigations, where records are incomplete or unreliable, regulators may rely on employee evidence — placing employers at a significant disadvantage.
Where Employers Trip Up
Common payroll compliance risks in Australia include:
- Assuming payroll systems are automatically correct
- Not regularly reviewing award coverage and classifications
- Estimating hours worked instead of recording them
- Treating record-keeping as administrative only
Small gaps can quickly escalate into significant financial and legal risks.
Key Lessons for Employers
Recent Fair Work Ombudsman cases reinforce that:
- Underpayments can result in substantial penalties
- Record-keeping is a legal requirement — not optional
- Awards and classifications must be regularly reviewed
- Strong oversight and governance are essential
Employers who rely on “set and forget” payroll processes are increasingly exposed to compliance risks.
Ask Yourself
To reduce risk, employers should regularly ask:
- Are employees paid under the correct award?
- Are hours properly recorded?
- Would your records stand up in a Fair Work audit today?
If there is any uncertainty, there may already be compliance risks within your business.
A Clear Enforcement Direction in Australia
These cases demonstrate a consistent regulatory direction:
- Increased enforcement of underpayment breaches
- Strong focus on employment record-keeping
- Greater scrutiny of systemic compliance failures
- No exemption for small or medium-sized businesses
With the introduction of criminal wage theft laws in Australia, the risks for employers — particularly where issues are ignored — are significantly higher.
How Harrisons Can Help
Harrisons supports organisations across Australia to proactively manage payroll and compliance risks through:
- Award interpretation and classification reviews
- Payroll and wage compliance audits
- Record-keeping and HR system improvements
- Support during Fair Work investigations
- Ongoing compliance strategies tailored to your business
We help employers move from reactive fixes to structured, defensible compliance frameworks.
Need Support Reviewing Pay or Records?
Staying compliant is easier with the right advice.
If you are unsure about your payroll practices or record-keeping obligations, now is the time to review your systems — before issues escalate.
Contact Harrisons today.
Claire Harrison is the Founder and Managing Director of Harrisons, a flourishing HR consulting business that sprouted in 2009 from Claire’s passionate belief that inspiring leaders and superstar employees are the key success factor to any business. With over 20 years’ experience, Claire has worked as a HR Director of multi-national organisations, as a Non-Executive Board Director, and a small business owner. Claire’s corporate career includes working with companies such as BHP, Westpac, Fonterra and Mayne Nickless.
