Lexology PRO analyses a year of enforcement activity by Australia's workplace regulator and what companies should expect in the year ahead.
Key takeaways
- Australia’s Fair Work Ombudsman ranks among the most active employment regulators globally by the volume of enforcement actions.
- Wage and working hours violations dominated enforcement action against companies.
- Hospitality, transport, construction, and education sectors faced the highest scrutiny.
Editor's note: A previous version of this article incorrectly stated the FWO was the second most active employment enforcer globally according to Scanner data. This has now been corrected.
Enforcement activity by Australia's Fair Work Ombudsman (FWO) intensified throughout 2025.
The regulator was among the most active employment authorities worldwide, alongside the likes of the US Equal Employment Opportunity Commission and the UK's Health and Safety Executive, according to Lexology PRO Scanner data.
Companies from Melbourne cafés to Darwin construction companies faced significant penalties for failures in wage compliance, record-keeping, and minimum entitlements.
The pattern is unmistakable: the FWO is doubling down on wage theft and underpayment, particularly targeting sectors with vulnerable workforces and high volumes of casual or migrant workers. Large companies and universities are not immune, as the regulator expands scrutiny across Australia's employment landscape.
The data in this article is based on Lexology PRO’s Scanner, our automated regulatory monitoring tool covering 18 regulatory areas and tracking over 1500 regulatory sources. Full details on Scanner’s regulatory coverage can be found here.
Enforcement includes any action the FWO has taken, including active investigations, audits, decisions, fines, penalties, settlements, and/or orders. This article covers data released between 1 November 2024 and 1 November 2025.
Understanding the Fair Work Act 2009
The FWO administers several laws and regulations that govern Australia's workplaces, with the Fair Work Act 2009 (FWA) serving as the cornerstone legislation. The FWA governs employee and employer relationships, provides a safety net of minimum entitlements for employees, enables flexible working arrangements, and provides for fairness at work, including preventing discrimination.
Employers across Australian states and territories fall under the FWA, including non-incorporated employers such as sole traders and partnerships.
Failure to comply with the FWA can lead to significant consequences for businesses and individuals, including financial penalties, legal action, and reputational damage.
Which sectors did the ombudsman target in 2025?
Lexology Scanner data reveals that enforcement actions concentrated heavily in four key sectors over the past year.
The prevalence of hospitality violations reflects systemic issues in an industry characterised by high staff turnover, complex award structures, and frequent use of casual and migrant workers who may be less aware of their entitlements.
In October 2025, a Melbourne café operator faced court proceedings over allegations that the company failed to fully pay workers' minimum wage rates. Two months earlier, multiple food outlets came under record-keeping scrutiny as the FWO intensified its focus on wage compliance in the hospitality sector.
Construction companies faced similar scrutiny, including a Darwin business and its director penalised AU$44,000 (US$29,000) for FWA breaches. According to the FWO, the company failed to calculate and back-pay a full-time employee.
Several large education groups came under the FWO’s thumb in 2025, including the universities of Wollongong, Sydney, and Melbourne. All three institutions underpaid thousands of staff, including both full-time and part-time employees.
What were the most common violations?
The data tells a stark story: 97% of FWO enforcement activity in the 12-month period focused on wage and working hours violations, according to Lexology PRO Scanner data.
The most common breaches included underpaying wages, failing to compensate employees for hours worked beyond standard schedules, and not maintaining accurate records of hours worked, wages paid, and leave taken.
A closer examination of the wage and hours violations reveals that many cases involve illegal working arrangements. Several enforcement actions targeted employers who exploited visa holders or migrant workers, paying below minimum wage while leveraging workers' precarious immigration status to avoid complaints. This intersection of wage theft and worker vulnerability represents a key enforcement priority for the FWO.
While the FWO and FWA also have jurisdiction over harassment and discrimination, these violations represented just a small portion of enforcement activity over the past year.
How to comply with the Fair Work Act
Examine the National Employment Standards
The National Employment Standards provide 10 minimum entitlements that all employees must receive, regardless of any modern award or agreement.
Under the standards, employers must:
- set the maximum weekly hours at 38 hours for full-time employees, plus reasonable additional hours;
- allow four weeks’ annual leave for full-time employees;
- offer 10 days’ personal or carer’s leave per year for full-time employees;
- offer up to 12 months unpaid parental leave; and
- state required notice periods and redundancy entitlements.
The Fair Work Handbook provides comprehensive guidance on applying these standards across different employment arrangements.
Pay correct wages and maintain accurate records
Employers must confirm that all employees receive at least the minimum wage under the relevant modern award or enterprise agreement. Modern awards are industry or occupation-based minimum employment standards that set pay rates, penalty rates, allowances, and conditions for specific sectors, including the restaurant and construction industries.
The FWO's Pay and Conditions Calculator helps employers verify correct rates for their industry and employee classifications. Underpayment remains the most common breach and can result in substantial fines or criminal liability for intentional violations, as a United Petroleum outlet in Melbourne discovered in October 2025.
Australia's minimum wage changes annually following Fair Work Commission decisions, typically announced in June and taking effect from 1 July. Employers should update pay rates promptly to reflect these changes. Modern award rates often exceed the national minimum wage, so employers in Australia should verify both the general minimum wage and their specific award obligations.
Record-keeping requirements
Accurate record-keeping is non-negotiable. Employers must maintain records showing hours worked each day and week, wages paid, including overtime and penalty rates, and leave taken and leave balances.
The FWO mandates employers keep these records for seven years and make them available to the FWO upon request.
What does 2026 hold for Fair Work Ombudsman enforcement?
In August 2025, the FWO announced its enforcement priorities for the year ahead, focusing resources on sectors and worker groups most vulnerable to exploitation.
The FWO identified several sectors that it will work with to ensure compliance, including agriculture, building and construction, fast food, restaurants and cafés, and universities.
Duncan Fletcher, Perth-based partner at Kingston Reid, suggests that “activity is more likely to be focused on issues rather than industries” in 2026. Persistent problems such as flat rates of pay across pay cycles as explored in recent court rulings against retailers Coles and Woolworths or annual leave accrual deduction across compressed rosters apply across to companies, no matter the sector.
Australian companies are keen to protect themselves against FWO scrutiny. Fletcher’s first piece of advice to business is not to panic.
“Employers should not feel compelled to race to the FWO and self-disclose matters as soon as they arise for fear of being prosecuted for ‘wage theft’. The regulatory system has been stablished to allow employers to seek legal advice about any issues that are identified, and to be given an opportunity to rectify and remediate employees so that they are no worse off.”
Instead of rushing to the regulator, Fletcher recommends seeking “sound legal advice” first. “An honest error, or validly held view about an interpretation which turns out to be wrong, will not harm an organisation if it is identified and fixed,” he tells Lexology PRO.