Senate Wage Theft Inquiry: What universities need to know

The inquiry at a glance

In March 2026, Senator Fatima Payman successfully moved a motion to refer the wage theft framework under the Fair Work Act 2009 (Cth) (the Act) to the Senate Committee on Education and Employment (Committee) for review. The motion followed a question to the Minister about why there had been no referrals to the Australian Federal Police or Department of Public Prosecutions since the criminalisation of wage theft — despite the budget and personnel allocated to the FWO for investigations and enforcement.

The Committee tabled its final report on 25 June 2026, examining “[t]he extent to which the wage theft framework under the Fair Work Act 2009, and the operation of subsection 327A(1), has led to a decrease in the incidence of wage theft in Australia, and any other related matter.”

This inquiry is separate from the Department of Employment and Workplace Relations' independent statutory review of the Closing Loopholes amendments to the Act, which included the wage theft provisions. That report was tabled in Parliament on 20 August 2026.

Key findings

The Committee reached seven key conclusions:

• The criminal offence’s effectiveness remains contested. The offence introduced by s 327A(1) has been in force since 1 January 2025, but experts, professionals and unions cannot agree on whether it has reduced the rate of wage theft.

• The offence is not achieving its intended impact. The Committee is not satisfied the offence is working as intended "on a small number of businesses who deliberately and persistently underpay their employees".

• No criminal prosecutions have been referred since the offence commenced, despite the FWO recovering over $358 million in unpaid wages for more than 249,000 workers in 2024–25.

• Complaints are rising. FWO data showed wage underpayment disputes rising from 12,059 in 2022–23 to 15,435 in 2024–25, with 12,570 received in the first three quarters of 2025–26 alone.

• Intentional and unintentional conduct are not clearly distinguished. Concerns remain that the legislation does not appropriately differentiate between deliberate and inadvertent underpayment.

• System complexity is a contributing factor. The complexity of the industrial relations system is a significant factor contributing to wage underpayment (and overpayment).

• Funding effectiveness questioned. The Committee is "not convinced that the almost $50 million provided to the Fair Work Ombudsman to administer the criminal offence is an effective use of taxpayer dollars".

Why universities are in the frame

Although the report addressed all sectors, evidence before the Committee, consistent with prior parliamentary inquiries, highlighted higher education as a prominent space of systemic underpayment. In response to a question on notice, the FWO confirmed that the education sector was an area where a large proportion of wage recoveries occurred.

A joint submission from university academics questioned whether the high evidentiary threshold of the offence, requiring proof of intentional underpayment, is suitable for capturing underpayments in the higher education sector.

The National Tertiary Education Union (NTEU) acknowledged in its submissions that s 327A "has likely had some deterrence effect insofar as NTEU has detected decreases in reported wage theft.” However, it stated that "systemic underpayments remain endemic to the higher education sector."

Senator Payman’s additional comments to the report noted that stakeholders “aren’t confident” the framework will effectively capture the institutionalised practices that result in wage theft in higher education in the medium to long term.

What to expect next

While there has been a noted decline in the FWO's direct engagement in the higher education space, this inquiry may prompt the regulator to reassess the sector over the next one to two years, including reviewing enforceable undertaking compliance and any ongoing or recurring issues.

Separately, the independent statutory review of the Closing Loopholes amendments has recommended a further targeted early review of the wage theft offence within approximately one year.

Key takeaways for the higher education sector

This inquiry sends a clear signal that universities remain under scrutiny on wage compliance. The key points for your institution:

• The criminal wage theft offence has been in force since 1 January 2025, and a further targeted review is expected within approximately one year. Stay across the evolving regulatory landscape.

• Underpayment complaints are trending upward, and the FWO continues to finalise remaining enforcement in the education sector.

• Higher education has been specifically identified as a sector where systemic underpayments persist. Stakeholders have expressed a lack of confidence in the framework’s ability to address institutionalised practices in the sector.

• It is imperative that you continue to review your institution’s payment practices and compliance frameworks now. With the FWO expected to reassess the sector over the next one to two years, ongoing proactive action is essential.

If you would like to know more about the inquiry, or need assistance reviewing your payment arrangements, please get in touch.