Can you afford to back-pay millions of dollars to underpaid staff?
- WorkPlacePLUS
- Jun 24
- 4 min read
Updated: 22 hours ago
It is important to keep track of your employer obligations and ensure that you are paying your staff their correct entitlements.
For example, when changes are made to Modern Awards, it's important to ensure that you update your payroll systems and mitigate the risk of a breach under the Award.
Employers also need to be aware that when wages are increased, allowances need to be increased accordingly. Failing to pay the correct allowances will effectively result in the unlawful underpaying of staff.
What is an Enforceable Undertaking?
An Enforceable Undertaking is a written agreement between the Fair Work Ombudsman (FWO) and an employer who hasn’t complied with their legal responsibilities under Australian Employment Regulations. Enforceable Undertakings are used by the FWO instead of taking the employer to court over non-compliance, such as not paying employees in accordance with their Enterprise Agreement. The employer needs to agree to back-pay employees for wages not paid and be audited for future compliance.
Recent examples of Enforceable Undertakings in the healthcare, social services, not-for-profit and education sectors:
▶︎ September 2025 - The University of Wollongong will complete more than $6.6 million in payments, including interest and superannuation, to 5,340 underpaid staff as part of entering into an Enforceable Undertaking (EU) with the FWO. Learn more >
▶︎ June 2025 - Griffith University will complete more than $8.34 million in payments, including interest and superannuation, to 5,457 underpaid staff as part of entering into an Enforceable Undertaking with the FWO. Learn more >
▶︎ April 2025 - A South Australian allied health services charity has signed an Enforceable Undertaking with the FWO to improve its workplace compliance after underpayments exceeding $76,000. Learn more >
▶︎ March 2025 - La Trobe University will complete more than $10.77 million in payments, including superannuation and interest, to more than 6,700 underpaid staff as part of entering into an Enforceable Undertaking with the FWO. Learn more >
▶︎ February 2025 - Relationships Australia Queensland has back-paid 980 staff more than $5.6 million, including superannuation and interest, and signed an Enforceable Undertaking with the FWO. Learn more >
▶︎ December 2024 - The University of Sydney will complete more than $23 million in payments, including superannuation and interest, to more than 14,000 underpaid staff as part of entering into an Enforceable Undertaking with the FWO. Learn more >
▶︎ December 2024 - The University of Melbourne will complete $72 million in payments, including superannuation and interest, to more than 25,000 underpaid staff as part of entering into an Enforceable Undertaking with the FWO. Learn more >
▶︎ June 2024 - Not-for-profit charity World Vision Australia Pty Ltd has back-paid staff more than $6 million, including interest and superannuation, and has signed an Enforceable Undertaking with the FWO. Learn more >
▶︎ June 2024 - The FWO has commenced legal action for a second time against the sole trader operator of Kreating Real Change Disability Services in NSW for failing to comply with a Compliance Notice after underpaying worker entitlements under the SCHADS Award and NES. Learn more >
▶︎ May 2024 - Disability support charity Open Minds Australia Limited has back-paid staff about $4.2 million after breaching its own collective agreement and has signed an Enforceable Undertaking with the FWO. Learn more >
▶︎ December 2023 - Hospital and aged care businesses operated by St Vincent’s Health Australia Ltd are back-paying staff in NSW and Queensland more than $4.4 million and have signed an Enforceable Undertaking with the FWO. Learn more >
▶︎ October 2023 - Aged care services provider Calvary Administration Pty Ltd have back-paid staff in Victoria, New South Wales, South Australia and Tasmaniamore than $2.1 million, including interest and superannuation, and have signed an Enforceable Undertaking with the FWO. Learn more >
▶︎ October 2023 - Disability support services provider Aruma Services Ltd has back-paid staff in Victoria more than $6.5 million, including interest and superannuation, and have signed an Enforceable Undertaking with the FWO. Learn more >
More than $2 billion back-paid to Australian workers over the last 5 years
The Fair Work Ombudsman recovered $358 million for more than 249,000 underpaid workers in 2024-25, taking back-payments to workers to more than $2 billion across the last five years.
According to the 2024-2025 Annual Report, the FWO entered into eight Enforceable Undertakings including a total of $47 million back-paid to employees in the financial year, and safeguards against future compliance issues within these employers. Of the eight, four were with universities.
The FWO also issued also issued 1,220 Compliance Notices, recovering $8.2 million in unpaid wages for 3,438 workers, and recovered $7.3 million for 2,120 workers through dispute assistance. Fair Work Inspectors also handed out 743 fines for record-keeping or pay slip breaches, with $838,000 in penalties paid.
How can employers avoid underpaying staff?
To mitigate the risk of underpaying staff, employers should regularly review their enterprise agreements and the relevant Modern Awards to ensure that all mandatory payments, including hourly rates, overtime, penalties and allowances, are being paid correctly. In addition, make sure you are using valid, well-drafted employment agreements.
For industrial relations support and practical assistance with workplace compliance, enterprise bargaining and business risk mitigation, please contact us today.
