New Civil Penalties in South Australia: Employers Face Increased Risk for Underpayments

Since 1 January 2026, employers in South Australia’s public sector and local government have faced increased legal risk in relation to underpayments and employee entitlements. Amendments to the Fair Work Act 1994 (SA) now allow the South Australian Employment Tribunal (SAET) to impose civil penalties of up to $25,000 per breach where employers fail to pay workers correctly.

While the changes don’t introduce new entitlements or obligations, they do expand the enforcement toolkit available to the SAET and represent a shift towards greater accountability in payroll compliance.

New Enforcement Pathway

Previously, the Act only provided for criminal penalties in response to underpayments or breaches of pay-related obligations. While serious, these were rarely pursued except in extreme cases. The civil penalty regime provides a more accessible and flexible enforcement option, allowing the SAET to intervene where there’s clear evidence of non-compliance, without requiring the higher threshold of criminal prosecution.

To trigger a civil penalty, the employer’s conduct must be both deliberate and systematic. Isolated or accidental underpayments won’t attract penalties under these provisions, but repeated or coordinated failures to meet payment obligations may.

What Constitutes ‘Deliberate & Systematic’?

Deliberate

Deliberate conduct must be intentional or conscious, not accidental or due to oversight. Where the employer is a government agency or body corporate, liability may be based on the conduct or state of mind of an officer or employee, or through evidence that the organisation authorised the conduct, whether explicitly or by implication. This could be embedded in workplace culture, policies, or practices that fail to prevent underpayments.

Systematic

Systematic refers to patterns of behaviour, such as repeated breaches over time, multiple employees affected, failure to respond to complaints, or ongoing non-compliance with payslip requirements. The more structured or prolonged the conduct, the more likely it is to meet this threshold.

Importantly, if a worker’s actions result in a breach, the employer may avoid liability if it can demonstrate that it took reasonable steps, including due diligence and compliance measures, to prevent it.

What Types of Payments Are Covered?

The civil penalty provisions apply to a wide range of payments, including:

• Wages and loadings;
• Overtime and penalty rates;
• Leave payments and bonuses;
• Allowances and superannuation; and
• Payments arising from WHS duties (e.g. training time for health and safety reps).

These must be paid in full, in money (such as bank transfer or cheque), and at least monthly.

Applications & Time Limits

Applications for civil penalties must be made within six years of the alleged contravention. Where multiple breaches arise from a single course of conduct, they may be treated as one breach for penalty purposes.

What Should Employers Be Doing?

Given the availability of civil penalties, public sector and local government employers should:

• Review their payroll systems and compliance processes;
• Ensure all payments are accurate and timely;
• Monitor how complaints and disputes are handled internally;
• Retain clear records and issue payslips in accordance with the law; and
• Conduct periodic audits of entitlements under enterprise agreements or modern awards.

While the changes do not create new obligations, they significantly increase the consequences for failing to meet existing ones.

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