Most of the coverage of Australia's wage theft laws has been written for direct employers. Check your award. Check your classifications. Check your payroll. Fair enough — that is where the offence sits.
But a lot of businesses in construction, civil, manufacturing and warehousing have twenty, fifty, a hundred people on site who are not on their payroll at all. If that is you, the honest question is not "are we paying correctly" — you are not paying those workers. The question is what happens to your business when the company that is paying them gets it wrong.
The short answer: less than a direct employer faces, more than most host businesses assume, and in South Australia and Queensland there is now a specific penalty attached to it whether you knew or not.
What actually changed
Since 1 January 2025, intentionally underpaying an employee's wages or entitlements has been a criminal offence under the Fair Work Act. It covers base rates, overtime, penalty rates, allowances, leave loading, redundancy pay and superannuation. Maximum penalties run to 10 years imprisonment, with fines up to $7.825 million for a company and $1.585 million for an individual.
The word doing the work in that sentence is intentionally. The criminal offence is aimed at deliberate conduct, not honest mistakes. An employer who gets a classification wrong and fixes it is not facing prison. That employer is still facing the civil penalty regime, which has a lower bar and catches mistakes as well as intent — but it is a different order of trouble.
There is also a pathway for small business. Employers with fewer than 15 employees who comply with the Voluntary Small Business Wage Compliance Code — broadly, checking the correct rates, self-identifying shortfalls and remediating them — cannot have that conduct referred for criminal prosecution.
Where a host business actually sits
Three separate things create exposure, and they are worth keeping apart because they behave differently.
1. Accessorial liability
Section 550 of the Fair Work Act makes a person or business that is "involved in" a contravention liable for it. Involved means aiding, abetting, procuring, inducing, or being knowingly concerned in the contravention — directly or indirectly. It is how directors, accountants and other businesses in a supply chain end up named in proceedings alongside the employer.
The Fair Work Ombudsman's own guidance uses an example that should stop most operations managers in their tracks: a business that pays a low contract price for on-hired workers, suspects the price is too low to cover the workers' overtime and penalty rates, and does not raise it with the provider.
That is not a technicality. That is a description of how a lot of labour is bought — take the cheapest quote, do not ask how it works, move on. Knowledge is the hinge. A host who genuinely had no idea is in a very different position from a host who was told, or who could see the arithmetic did not add up and said nothing.
2. Labour hire licensing
This is the one that has changed most recently, and it does not require you to know anything at all.
South Australia's labour hire licensing scheme was extended to cover all industries from 29 January 2026. Providers in the newly covered industries had a six-month transition period, which ended on 29 July 2026. Consumer and Business Services has applied temporary exemptions to providers whose paid applications were accepted on or before that date and are still being finalised, and those exemptions also cover the businesses using them.
For host businesses, the relevant part is short. Hosts must ensure their provider is licensed. The same maximum penalties that apply to an unlicensed provider apply to a host that enters into an arrangement with one: $140,000 for an individual and $400,000 for a body corporate. There is no requirement that you knew the provider was unlicensed.
Queensland has run a licensing scheme under the Labour Hire Licensing Act 2017 since 2018, with the same structure — providers must be licensed, hosts must only engage licensed providers, and penalties apply to both sides. Victoria has its own scheme. New South Wales does not, which means a business operating across Sydney, Adelaide and Brisbane has three different sets of obligations for what looks like one procurement decision.
3. The operational risk nobody costs in
If a provider is prosecuted, deregistered, or simply collapses under a back-payment bill, the workers on your site stop being your provider's problem and start being yours — usually with no notice and usually at the worst point in the programme. That risk does not appear on any compliance register. It shows up as a crew that did not arrive.
The regulator is not theoretical about this
In 2024–25 the Fair Work Ombudsman recovered $358 million for more than 249,000 underpaid workers, taking back-payments past $2 billion over five years. It issued 1,220 Compliance Notices, recovering $8.2 million for 3,438 workers, and filed 73 new litigations. Building and construction was a named focus area, with more than $9.8 million recovered in that sector alone.
None of that is aimed squarely at host businesses. But it tells you how much attention the sector is getting, and how many of these matters end up looking at the whole chain rather than one company in it.
What host employers should actually do
Check the licence on the register, not in the email. A licence number in a capability statement proves nothing. Both South Australia and Queensland publish a public register. Look the provider up, confirm the entity name matches the one on your contract, and keep a dated screenshot with the supplier file.
Re-check it at renewal. Licences are annual. A provider who was licensed when you onboarded them two years ago is not necessarily licensed today. Tie the check to your supplier renewal cycle so it happens whether anyone remembers or not.
Understand what your contract rate has to cover. You do not need to audit anyone's payroll. You do need to know what award and classification the provider says they are applying, and to be able to see that the rate you are paying leaves room for overtime, penalties, leave, superannuation and workers' compensation. If a quote is well under everyone else's and nobody can explain why, that is the conversation the Fair Work Ombudsman's example is describing.
Ask who actually employs the worker. If workers are subcontracted on, passed through a second entity, or engaged as contractors rather than employed, accountability is split — and split accountability is exactly what fails when something goes wrong. A straight answer to "who pays this person" should take one sentence.
Keep your own hours records clean. You approve the timesheets. In any dispute about what a worker was owed, the host's record of hours worked is often the clearest evidence in the room. Approve accurately, keep the records, and do not sign off hours you have not checked.
Give workers somewhere to raise it. Most underpayment issues surface as an offhand comment on site long before they surface anywhere official. If a labour hire worker tells your supervisor something looks wrong with their pay, your supervisor should know exactly who to pass that to — and it should go somewhere, not nowhere.
Get advice on your own arrangements. This article is general information, not legal advice. If you have a complex supply chain, on-hired contractors, or a provider you are not certain about, talk to an employment lawyer about your specific situation.
The plain version
The wage theft laws did not make host businesses responsible for somebody else's payroll. What they did was raise the stakes across the whole chain at the same time state licensing rules were widening. A host who checks the licence, understands what the rate covers, and knows who employs the people on site has dealt with most of it. A host who takes the cheapest quote and asks nothing is carrying risk they have never priced.
EIR Labour Hire
EIR Labour Hire has been supplying workers across civil, construction, manufacturing and warehousing since 2003 — over 22 years. We place labourers, operators, tradies and admin support in South Australia, New South Wales and Queensland.
Our workers are employed by us directly, not subcontracted on. We hold current labour hire licences in the states that require them, and clients can request our licences, insurances, policies and SWMS through the client resources area rather than chasing us for a PDF. When a new client asks who employs the worker, what award applies, and where the licence is registered, that is a good sign — those are the right questions, and they should be easy for any provider to answer.
If you are not sure where your current arrangements sit, start with the register check. It takes two minutes and it is the one item on the list with a dollar figure attached.
Sources: Fair Work Ombudsman, "Criminalising wage underpayments and other issues" (Closing Loopholes); Fair Work Ombudsman, Voluntary Small Business Wage Compliance Code 2025; Fair Work Act 2009 (Cth) s 550 and Fair Work Ombudsman guidance on accessorial liability and labour hire supply chains; Office of the Fair Work Ombudsman Annual Report 2024–25 (October 2025); Consumer and Business Services (SA), "Labour hire licensing reforms" (updated 30 July 2026); Labour Hire Licensing Act 2017 (SA); Labour Hire Licensing Act 2017 (Qld).