Why Small Businesses Can’t Afford to Ignore Fair Work Compliance in 2025
Australian small businesses, especially those with fewer than 50 staff are facing a new era of workplace regulation and enforcement. Recent actions by the Fair Work Ombudsman (FWO) highlight the risks and responsibilities for business owners, with retail, food and hospitality, finance and professional services and entertainment industries increasingly in the spotlight.
At HR Excellence Partners, we understand these pressures and are committed to helping you stay compliant, confident, and focused on growth.
The Compliance Landscape Is Changing Fast
The FWO recovered a record $473 million in unpaid wages in 2023–2024, with over 2,500 Compliance Notices and nearly 800 fines issued for pay slip and record-keeping breaches4. While large corporates dominate headlines, small businesses make up a significant share of enforcement actions, often because they lack the in-house HR and payroll resources of bigger firms.
New laws introduced in 2025 have criminalised intentional underpayment of wages, meaning business owners and managers can now face personal liability, including fines up to $1.65 million or even jail time for the most serious breaches4.
Why Are Small Businesses Getting Caught Out?
Many small firms, including those in finance and professional services, struggle with:
- Complex awards and agreements: Navigating Australia’s intricate workplace laws is tough, especially with frequent updates and industry-specific rules4.
- Outdated payroll systems: Manual or legacy systems increase the risk of errors and missed entitlements.
- Lack of regular audits: Without periodic checks, small mistakes can quickly snowball into major compliance issues.
- Record-keeping gaps: Failing to issue correct pay slips or keep accurate records is one of the most common and easily penalised breaches4.
Real-World Consequences: Recent Cases
Recent FWO actions show the real cost of non-compliance for small businesses:
- Ansa Finance Pty Ltd (Melbourne): Fined $99,900 for underpaying five workers and ignoring Compliance Notices. The company was ordered to back-pay all entitlements, plus interest and superannuation.
- First Step Finance Pty Ltd (Sydney): Penalised $117,190 for failing to pay three staff correctly and issuing false pay slips. The court described the breaches as “considerable and persistent.”
- In food and retail, small outlets like Mr Viet (Adelaide) and La Porchetta franchises have faced six-figure fines and public scrutiny for similar underpayments and poor payroll practices.
The Ripple Effect: More Than Just Fines
Non-compliance isn’t just about penalties.
Public FWO reports mean reputational damage, potentially harming your ability to attract clients and top talent.
With over 310,000 workplace enquiries to the FWO last year and a growing focus on professional services, small businesses can’t rely on flying under the radar5.
How to Protect Your Business And Your Reputation
Smart business owners are taking proactive steps:
- Regular payroll audits: Identify and fix issues before they’re discovered by regulators.
- People Manager training: Ensure your team understands Fair Work procedural requirements and how to apply Award rules correctly.
- Robust systems: Upgrade payroll and HR systems and processes to reduce manual errors.
- Expert advice: Partner with specialists who know your industry and can help you interpret complex legislation4. This is where HR Excellence Partners can help!
Why Work With HR Excellence Partners?
At HR Excellence Partners, we specialise in helping small businesses especially those in industries including finance and professional services (but not limited to), navigate Australia’s evolving workplace laws. Our tailored solutions are designed to keep you compliant, minimise risk, and free you to focus on what you do best.
Don’t wait for a compliance notice or a costly mistake. Join the growing number of businesses taking action now to protect their people and their reputation.
Contact us today at hrexcellencepartners.com.au to find out how we can help your business stay ahead of the curve.
| Industry | What the Industry Does | Who It’s Comprised Of | Breach Rate/Incidents | Common Breaches/Issues | Recent Entities/People Fined or Reprimanded | Recent Fair Work Ombudsman Actions/Public Reports |
|---|---|---|---|---|---|---|
| Retail | Sells goods to the public, in-store or online | Supermarkets, department stores, specialty shops, online retailers, convenience stores | Very high | Underpayment, record-keeping failures, payroll errors, non-payment of penalty rates | Woolworths, Coles, 7-Eleven, Michael Hill Jeweller | Surprise inspections and fines for poor record-keeping in mobile phone shops, discount stores, butchers, bakeries, and florists3 7. |
| Food & Hospitality | Prepares and serves food and beverages for immediate consumption | Cafés, restaurants, takeaways, bars, catering businesses | Very high | Underpayment, wage theft, non-compliance with awards, payroll errors | Grill’d, George Calombaris’ MAdE Group, Han’s Café, Mr Viet | Mr Viet fined over $800,000 for systematic underpayment and exploitation of 36 workers, mostly international students5. |
| Professional Services | Provides expert advice or services (finance, law, accounting, consulting) | Small home, commercial and asset finance brokers, legal firms, accounting practices, consultancies | High and rising | Payroll errors, non-compliance, data breaches | Ansa Finance, First Step Finance, Hall & Wilcox Lawyers | Ansa Finance and First Step Finance fined for underpayment, ignoring Compliance Notices, and failing to back-pay workers2 5. |
| Entertainment | Delivers leisure, amusement, and cultural activities | Cinemas, live event venues, amusement centres, arts organisations | High | Payroll errors, data breaches, underpayment | Event Cinemas, Village Roadshow, ACMI | Litigation outcomes for payroll errors and underpayment; FWO actions against cinemas and live event venues for non-compliance2. |
Sources:
2: 2024–2025 Fair Work Ombudsman litigation outcomes
3: Record-keeping blitz and surprise inspections
5: SBAAS roundup of Fair Work cases and penalties
7: FWO commentary on record-keeping as a compliance trigger
References:
- Fair Work Ombudsman, “Record Wage Recoveries,” 2024–20254
- Fair Work Ombudsman, “Minimum Wages Increase 3.5% from 1 July 2025”2
- Australian National Audit Office, “Effectiveness of the Office of the Fair Work Ombudsman’s Regulatory Functions,” 20255
- https://www.fairwork.gov.au
- https://www.fairwork.gov.au/about-us/workplace-laws/annual-wage-review/annual-wage-review-2024-2025
- https://www.fairwork.gov.au/pay-and-wages/minimum-wages
- https://www.mapien.com.au/blog/record-wage-recoveries/
- https://www.anao.gov.au/work/performance-audit/effectiveness-of-the-office-of-the-fair-work-ombudsmans-regulatory-functions
- https://mynewaustralianlife.com/working-in-australia/2025-minimum-wage-in-australia/
- https://www.fwc.gov.au
- https://www.fairwork.gov.au/employment-conditions/information-statements/fair-work-information-statement
