Being paid less than you are owed is a problem many Australian workers face. It can happen through a wrong pay rate, missing penalty rates or unpaid leave. Sometimes it is an honest mistake. Sometimes it is not.
The good news is that workers have clear legal options to get that money back. Most claims never need a lawyer or a long court case. This guide explains how to check your pay, raise the problem and use the small claims process if you need to.
What counts as an underpayment
An underpayment is any shortfall between what you were paid and what the law says you should get. Under the Fair Work Act 2009, your minimum pay can come from the National Employment Standards, a modern award, an enterprise agreement or a minimum wage order. If your employer pays below any of these, the gap is money owed to you.
The base hourly rate is just one part of it. Underpayments can include penalty rates for weekends and public holidays, allowances and leave entitlements. They can also include unlawful deductions from your pay and unpaid superannuation. Each of these can be claimed back.
Start by checking your pay slips
Your pay slip is the first place to look. Employers must give employees a pay slip within 1 working day of pay day, even if the employee is on leave. Pay slips can be paper or electronic, but electronic ones must hold the same information. Fines can apply if pay slips are not given at all or not given on time.
According to the Fair Work Ombudsman pay slip rules, a pay slip must show the names of the employer and employee and the pay period. It also needs the payment date, the gross and net pay and any deductions. Super contributions must be listed with the amount and the fund name or number. If you are paid by the hour, the slip should show your ordinary hourly rate and the hours worked at that rate.
Compare these details with the award or agreement that covers your job. Check that loadings, allowances and penalty rates appear where they should. Keep every pay slip you receive, along with your own record of the hours you worked. A simple diary or calendar note made at the time can be very useful later.
Raise the problem with your employer
The Fair Work Ombudsman suggests trying to sort out the problem directly with your employer first. You can do this even after you have left the job. A calm conversation often fixes a payroll error quickly. Bring your pay slips and your own records so you can point to the exact gap.
If talking does not work, the next step is a formal letter. Set out the dispute, the entitlements you believe are owed and a deadline. Say that you will make a small claim if the money is not paid by that date. Keep copies of everything you send and every reply you get.
Most of these disputes are about the business, not the people in it. Still, directors and managers carry legal duties for how a company is run. Our article on appointing a new company director covers some of the responsibilities that come with that role.
Using the small claims process
If the money is still not paid, the small claims process is built for exactly this kind of problem. It can be used for underpayment claims of up to $100,000. Interest can also be claimed in some circumstances. The application must be made within 6 years of the date of the contravention.
You can choose between 2 types of court. One is the Federal Circuit and Family Court of Australia. The other is the magistrates court in your state or territory. Both offer a similar service, and the Fair Work Ombudsman cannot choose a court for you.
The Fair Work small claims process is usually faster, cheaper and more informal than other court cases. Both sides normally represent themselves. A party who wants a lawyer must first get the court’s permission. If you win, the court may let you recover the filing fees you paid.
The employee is usually the applicant and the employer is the respondent. The first hearing is usually held before a registrar or court representative rather than a judge. Most matters are resolved in that one hearing. In some cases the Fair Work Ombudsman may help you lodge the application.
Going to court can feel like a big step, even in a small claim. The same basic rules about records and clear communication that help a business avoid being taken to court also help a worker win a claim. Good paperwork does a lot of the heavy lifting in both cases.
When underpayment becomes a crime
Since 1 January 2025, intentionally underpaying an employee’s wages or entitlements can be a criminal offence. Honest mistakes are not covered by this offence. The Fair Work Ombudsman can investigate suspected criminal underpayments and refer suitable matters for prosecution. If convicted, a court can impose fines, prison time or both.
There is a Voluntary Small Business Wage Compliance Code for small employers. If the regulator is satisfied a small business complied with the Code, it cannot refer that business for possible prosecution. Compliance with the Code depends on whether the employer intended to underpay. A worker can still recover the money owed through the civil process either way.
Why this matters beyond one pay packet
Underpayment is a fairness issue as much as a legal one. A few dollars an hour adds up to a large sum over months or years. That loss can hit hardest for workers on low incomes.
Many people know they can claim back money from a business that sells them a faulty product. Our guide to consumer guarantees explains how that works. The same idea applies to work. If you have done the hours, the law says you are entitled to the minimum pay for them.
Holding a business to account for harm is not limited to wages either. People can bring claims for many kinds of loss, as our article asking can I sue after surgery goes wrong shows. Each type of claim has its own rules and time limits, so check them early.
Frequently asked questions
Can I claim unpaid wages after I have left the job?
Yes. You can still raise the problem with your former employer and make a small claim. The application must be made within 6 years of the date of the contravention. Acting sooner usually makes evidence easier to find.
Do I need a lawyer for a small claim?
Usually not. Both parties normally represent themselves in the small claims process. A party who wants a lawyer needs the court’s permission first.
Can I claim unpaid super through small claims?
Yes. Unpaid superannuation is listed as one of the entitlements that can be claimed. Unlawful deductions from pay can also be claimed.
What if my employer made an honest mistake?
Honest mistakes are not covered by the criminal offence. You are still entitled to be paid what you are owed. The money can be recovered through the civil process.
This article is general information about Australian workplace law and is not legal advice. Laws and court processes differ between states and territories and change over time. For advice about your own situation, speak with a qualified lawyer.