In the 2024–25 financial year, more than $1 million in underpayments were recovered for WA workers. Around 230 employees had wages and entitlements repaid following unannounced inspections by the Department of Local Government, Industry Regulation and Safety.
The most common issue? Long service leave. It’s been a repeat offender across consecutive years, often because businesses don’t fully understand when it becomes payable. In WA, most private sector employees are entitled to take long service leave after 10 years of continuous employment. However, if an employee leaves after seven years, they may still be entitled to a pro-rata payout.
The café and restaurant sector remains a key focus, with previous campaigns finding that four out of five businesses were not meeting their obligations. Common issues include underpayment of wages, incorrect leave loading, and missing or inaccurate pay slips. Inspectors are also taking a tougher stance, targeting repeat offenders and high-risk industries such as hospitality.
Civil Penalties Under WA Law
- Court-Sanctioned Penalties
Under the Industrial Relations Act 1979 (WA), the Industrial Magistrates Court can impose civil penalties for contraventions of industrial instruments (like awards or agreements).- Up to $2,000 per contravention for general breaches.
- Up to $5,000 per contravention for breaches that include civil penalty provisions.
- Back-Payment Orders
If employers underpay staff, the court can order repayment of the owed wages, including back-pay and the costs of calculating those amounts. - Payslip and Record-Keeping Failures
Failing to issue payslips or maintain proper payroll records can result in:- Up to $13,000 for individuals (or up to $65,000 for companies).
- For serious contraventions, penalties rise to $130,000 for individuals and $650,000 for companies.
Steps to Stay Compliant
- Audit payroll and entitlements: Review wages, allowances, and leave balances. Keep a close eye on long service leave if staff are nearing seven or ten years of service.
- Check Award coverage: Confirm classifications, pay rates, and penalty structures. Don’t rely on old spreadsheets or “what we’ve always paid.”
- Keep records in order: Timesheets, payslips, and leave records must be accurate and accessible, and kept for 7 years
- Stay up to date: Awards and entitlements change regularly, so make it a habit to check for updates.
Underpayments remain a key focus for inspectors in WA. Reviewing your Awards, entitlements, and records now is the best way to avoid penalties and protect your business.
At ProcessWorx, we are committed to helping businesses strengthen their HR compliance. If you’d like to learn how ProcessWorx can assist with Human Resources or Work Health & Safety, please contact us on 08 9316 9896 or enquiries@processworx.com.au. Also watch an Introduction to ProcessWorx.
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