Australian businesses are being warned to take immediate steps to prepare for the upcoming minimum wage increase, or risk facing fines and costly backpay claims.
From July 1, 2025, the national minimum wage will increase to $24.95 per hour or $948 per week, based on a full-time, 38-hour working week.
Vertruen Chief Executive Officer Craig Rollinson said businesses with staff earning the minimum wage have fewer than four weeks to ensure they’re ready for the change.
“Non-compliance, even if unintentional, can result in back payments, fines, and in some cases, legal action,” he said.
“Now is the time for employers to review their payroll systems, update employment contracts, and seek professional advice if they’re unsure.”
Mr Rollinson said while most employers wanted to do the right thing, many were caught out by the complexity of modern awards and varying pay rates.
“A small oversight can quickly become a big problem – especially for SMEs without dedicated HR or payroll teams.
“Getting ahead of these changes now will save businesses time, money, and stress down the track.”
In 2023-24, the Fair Work Ombudsman recovered $473 million for nearly 160,000 underpaid workers, with $333 million of that figure coming from major employers.
Mr Rollinson advised business owners and human resource professionals to review past payroll records for signs of underpayment or non-compliance.
“This increase will compound any existing payroll issues that need to be addressed,” he said.
“If a business is already underpaying their employees, the gap will only widen from the first pay cycle in July, so getting on top of your compliance now could prevent facing bigger consequences from the Fair Work Ombudsman down the track.
“Mistakes in payroll aren’t always deliberate, but they can have devastating effects. A missed pay rise, a miscalculated shift – it all adds up and erodes trust. That’s why we’re urging employers to review their past payroll records immediately.
“In the last financial year alone, nearly 160,000 Australian workers were underpaid – that’s not just a number, that’s real people struggling to make ends meet because their employer got it wrong.
“With over $470 million recovered by the Fair Work Ombudsman, this isn’t just a compliance issue — it’s a wake-up call. Employers need to act now, not just to avoid penalties, but to do the right thing by their people.
“We’ve seen major brands make headlines for underpayments, but smaller businesses are just as vulnerable. No one is immune. If you don’t have full confidence in your systems or past processes, now is the time to seek help — before the regulator comes knocking.
“No business wants to betray the trust of their workers or end up in the headlines for something that is completely preventable.”
Businesses in the accommodation and food services, health care and social assistance, retail trade, and administrative and support services sectors will likely be most impacted by the changes.
The advice is to act quickly and consult a qualified compliance expert to review their wage structures, contracts, and past payments.
