The Fair Work Ombudsman (“FWO”) has released its most recent annual report, which reveals another significant recovery of $358 million in unpaid wages and entitlements for the 2024-25 financial year. The latest $358 million means that the FWO has been involved in the back-payment of more than $2 billion over the last five years.
Last year’s recoveries arose from the following key activities:
More than $23.7 million in court-ordered penalties
1,220 compliance notices
743 infringement notices
1,442 proactive activities
The FWO also published its revised Compliance and Enforcement Policy in January 2025 and new Payroll Remediation Guide in April 2025.
A key feature of the FWO’s activity last financial year was its focus on targeted proactive compliance, including through increased “surprise” site inspections across its priority sectors.
We outline below the FWO’s reported activities in relation to its 2024-25 priority areas.
Aged care and disability support services
The aged care sector was identified as a new priority area, with the FWO completing 136 matters and recovering more than $10.6 million for affected workers.
In the disability support services sector, the FWO recovered more than $20 million in unpaid entitlements.
The FWO has noted that the most common areas of non-compliance in these sectors were non-payment of overtime and penalty rates, missed allowances and incorrect payments of final entitlements on termination of employment. Shiftwork is also prevalent in these sectors, with non-compliant rostering arrangements and non-payment of shift loadings and sleepover allowances also arising as a common issue.
Large corporates
The large corporate sector accounted for the highest recovery out of the FWO’s priority areas, with almost $213 million retrieved for workers.
Underpayments in this sector largely stemmed from:
incorrect award coverage and classification;
payment of annual salaries that were insufficient to cover minimum award entitlements, including overtime and penalty rates, allowances and loadings;
failure to prioritise workplace relations compliance into corporate governance frameworks;
inadequate processes for encouraging and considering employee queries or complaints, or looking for trends in isolated pay queries as potential indicators of systemic non-compliance; and
a lack of investment in payroll systems, expertise and pay reviews.
Other activities of note
The FWO also secured recoveries of more than $9.8 million in the building and construction sector, $361,620 in the agriculture sector and $3.1 million in the fast food, restaurants and cafes sector.
For a snapshot of the FWO’s accepted enforceable undertakings and litigation outcomes for the 2024-25 financial year, see our related Insight here.
Employers should be mindful of the FWO’s increased enforcement and compliance efforts and seek urgent advice if they are contacted by the regulator. In the meantime, businesses must remain proactive in respect of their payroll compliance to ensure they are best-placed to respond to any underpayment investigations or claims. If your organisation requires assistance regarding its employment obligations, please reach out.
Cowell Clarke is pleased to offer its RemCheck service to organisations that wish to obtain peace of mind by confirming their payroll compliance. Our Employment & Workplace Relations Team can also provide advice should you have any queries or concerns. Contact Cassie Burfoot, Director, Emily Gray, Senior Associate, or Jemma Andretzke, Lawyer, for further information.