How do I know if I’m being underpaid?

How do I know if I’m being underpaid?

Under the Fair Work Act 2009 (Cth) (‘Fair Work legislation’) all employers need to comply with the minimum requirements set in the National Employment Standards (‘NES’) and any relevant industrial award.

A breach of an award or the NES is a civil breach of the Fair Work legislation and can result in very significant financial penalties for the employer.

While many employers do the right thing by their employees, there is still a significant number who may be advertently or inadvertently underpaying their employees.  Employers must ensure that they are educated when it comes to paying wages and be aware of consequences when they do not pay employees correctly. Wage theft doesn’t only constitute underpayments, it can also include sham contracting, unpaid superannuation and the misuse of ABNs.

Businesses should be proactive when it comes to correctly paying wages and not wait to be audited before rectifying underpayments.

According to Fair Work Australia, employers must follow the below steps if they find that they have been paying their employees incorrectly:

  • Step 1: Work out how long the employee has been underpaid
  • Step 2: Work out how much the employee was actually paid
  • Step 3: Work out how much the employee should have been paid
  • Step 4: Calculate how much the employee has been underpaid
  • Step 5: Backpay the employee
  • Step 6: Keep up-to-date with future wage increases

Employers must also ensure that their employees are paid for all time worked including training in team meetings, opening and closing the business and working unreasonable trial shifts.

If an employee is concerned about whether their employer is paying their correct wages, they should check their enterprise agreement or other registered agreement. Alternatively, The Fair Work Ombudsman has brought in a new interactive tool to check that employees are being correctly under the correct award.

Employees should also be aware that as of the 1st July 2019, there was a 3.0% increase to the minimum wage in Australia, with the new national minimum wage increasing to $740.80 per week or $19.49 per hour.

If employees are unsure about their wages or their employment contracts, seeking legal advice is recommended.



  • McDonald Murholme employment lawyers Call 03 9650 4555 or Email
  • This field is for validation purposes and should be left unchanged.
Talk to a lawyer