In 2025-26, the Fair Work Ombudsman made a big impact, helping over 181,000 workers get the pay they deserved - a total of $453 million in unpaid wages and entitlements. This was a 27% jump from the previous year. The regulator also stepped up its proactive investigations, nearly doubling the number to more than 2,680, up from around 1,400 the year before.
For many business owners, figures like this can feel distant, something that happens to large corporates with sprawling payrolls and dedicated HR teams. Gazelle Kalk, Associate Director, Content and Training at Peninsula Australia, says that assumption is exactly where the risk starts.
"The recovery of over $453 million in unpaid wages and entitlements highlights the importance of employers proactively reviewing their award interpretation, record-keeping practices and payroll systems," Kalk said.
Small businesses aren't exempt
It's easy to assume underpayment is a big-business problem. Kalk says that's not how it plays out in practice.
"Many business owners assume underpayment issues only happen to larger organisations, but payroll errors, award misinterpretations and employee classification mistakes can occur in businesses of any size."
A single misclassified role or an outdated award interpretation can quietly compound over months, regardless of how many people are on the payroll.
Where the risk actually starts
Kalk draws a clear line between deliberate wage theft and the kind of errors most small businesses are actually dealing with. "Importantly, these figures don't necessarily indicate widespread deliberate underpayment. Many employers want to do the right thing but are struggling to keep pace with an increasingly complex workplace relations system."
That complexity is compounding as enforcement ramps up. With proactive investigations nearly doubling this year, Kalk says the calculation for employers needs to change.
"With Fair Work almost doubling its proactive investigations, employers should be treating workplace compliance as a business-critical risk rather than simply an administrative task."
The danger, she says, isn't usually one dramatic failure, it's a slow build. "Too often, employers don't discover an award-related error until it has been building for months or even years, turning what could have been a minor issue that is easily able to be resolved into a significant financial liability."
What employers can do now
Kalk's advice is simple: check before problems compound, not after. "Regularly checking award coverage and seeking advice before making workforce decisions can help employers identify issues early and avoid potentially significant back-pay liabilities and associated financial penalties."
Her closing point is worth remembering. "The reality is that getting workplace compliance wrong has never been more costly, and getting it right has never been more important."