How to Avoid Wage Theft (and Be a Better Business While You’re At It)

We wish this went without saying, but here we are: people deserve to be paid properly for their work. Sounds obvious, right? Yet, more than a million Australian workers have experienced wage theft. Yep, over a million. 

Sometimes it’s cash-in-hand work with no entitlements. Sometimes it’s dodgy contract work flying under the radar. Other times it’s just conveniently ‘forgetting’ to pay overtime or super.  In the cleaning industry, a common tactic is assigning fewer hours than a job realistically requires — then claiming workers are being paid award wages.  However it shows up, it’s way more common than you think. 

During our time in the cleaning industry, we’ve seen this problem more times than we can count. There are too many stories of workers, often migrants, students, or people doing it tough, being paid below award rates, denied basic entitlements, or pushed into insecure work with zero protections. 

If you’re running a business, leading a team, or making decisions around suppliers and service agreements, fair work practices are part of your responsibility. You might not be processing payslips or setting rosters yourself, but if you’re hiring contractors or managing external providers, you’re still accountable for how people are treated, whether they’re on your payroll or not. 

The good news? It’s entirely possible and, dare we say, easy, to avoid wage theft — and build a fairer and better business in the process.

First, Know What Wage Theft Actually Looks Like

The stereotypical idea of wage theft is something obvious and malicious, like a boss pocketing someone’s paycheck. But in reality, it often looks more like a slow erosion of rights: misclassifying employees, skipping penalty rates, underpaying for overtime, or withholding super. Sometimes, it’s subcontractors operating layers below the surface, disguising dodgy practices behind their proposals. And sometimes, it’s sham contracting, like calling someone an ‘independent contractor’ when they’re working regular shifts, using the company’s equipment, and doing the same tasks as employees.

In industries like cleaning, these practices are so common they can almost seem normal. But that doesn’t make them okay. And turning a blind eye, even unintentionally, doesn’t make your business immune from the legal or ethical consequences.

The Consequences of Wage Theft (There’s a Lot)

Here’s the deal. As of 1 January, 2025, wage theft is officially a serious criminal offence in Australia. As in, jail time and fines of up to $7.8 million kind of serious. 

And that’s before you add up the cost of back pay, legal fees, and audit costs. Individual directors and managers can also be held personally liable — not just the company as a whole. So all this to say, it can get real expensive real fast to underpay your staff.

But it’s not just the legal consequences that matter. Ethically, wage theft erodes trust, and creates cultures where people feel undervalued, disposable, and disempowered. Word can travel fast, and it can have a serious impact on your ability to hire talent.

How Businesses Can Avoid Wage Theft (Spoiler: It Isn’t Hard) 

The steps to prevent wage theft aren’t rocket science. Here’s the 101 of avoiding wage theft:

  • Start with clear contracts. Every employment contract should clearly outline the employee’s role, award classification, pay rate, and entitlements. Avoid vague language, and make sure it lines up with what’s actually happening on the ground.

  • Train the people who need to know this stuff. Your HR team, payroll staff, and managers should be across current workplace laws and award obligations. That means knowing things like when penalty rates apply, how breaks should be managed, and how to classify employees correctly. 

  • Run regular payroll audits. Think of it as a routine check-up, not a last-ditch emergency. Audits can help spot things like misclassifications, incorrect rates, or missed entitlements before they become full-blown legal dramas. Even better, get an external review every now and then.

  • Use compliant payroll systems. Modern payroll software helps you automate compliance and reduce human error. They’re not perfect (no system is), but they take a lot of the guesswork out and make it easier to catch problems early.

Keep communication open. Employees should feel safe raising concerns about pay or conditions. That doesn’t mean you’ll get everything right 100% of the time, but it does mean you’ll hear about issues before they escalate.

Ask the Right Questions From Your Partners

If you’re engaging a supplier — whether it’s for cleaning, catering, logistics, or labour hire — you’re well within your rights to ask how they treat their workers. In fact, it’s your responsibility.

Start with a conversation where you can ask how they ensure their teams are paid in line with the award. Find out whether their workers are employed directly or subcontracted, and whether they’re receiving entitlements like superannuation, leave, and penalty rates. You can also ask for evidence, like certifications, policies, or audit reports, to back it up. And if someone gets cagey or gives you the whole ‘don’t worry about that, we’ve got it covered’ chat? Run, because that’s a big neon red flag.

It might feel uncomfortable at first, but trust us on this: any ethical operator will welcome the opportunity to talk about their practices.

The Bottom Line

Wage theft doesn’t have to be part of business as usual. If more companies ask better questions, expect more from their suppliers, and refuse to accept dodgy practices as the norm, we can help ensure that all Australians are paid properly, treated fairly, and given the respect they deserve.

At EarthWize, we never hesitate to call out wage theft and unethical practices when we see them, and neither should you. Everyone has a role in defining what fair work looks like, and together, we can build a more ethical and equitable future for all workers.