The Fair Work Ombudsman released its 2025-26 recovery figures this month, and the trend is unmistakable: enforcement is ramping up. The regulator recovered more than $453 million in unpaid wages and entitlements for over 181,000 workers, an increase of about $95 million, or 27 per cent, on the year before. Cumulative back payments over the last six years now sit at almost $2.5 billion.

Proactive checks are the big shift

The more telling number for small business owners is not the total recovered, it is how the regulator found it. Proactive investigations, meaning audits the Fair Work Ombudsman starts itself rather than ones triggered by a complaint, almost doubled: up 86 per cent to more than 2,680, compared with around 1,400 the year before. Those proactive checks alone recovered over $45 million for nearly 13,800 workers. In other words, waiting for an employee to complain is no longer the main way underpayment gets found. A business can be checked without anyone raising a hand.

Big business carried much of the total, small business is still squarely in scope

Close to half of the year's recoveries, $217.3 million for more than 110,000 workers, came from the large corporate sector. That headline number is not really about small operators. But Fair Work Ombudsman Anna Booth described what her office finds as a continuum of non-compliance, from inadvertent mistakes to deliberate acts, and said the regulator acts proportionately to what it finds, backed by free resources and advice to support sustained compliance. That distinction between an honest error and a deliberate act is exactly where small business protection lives.

The safety net for genuine mistakes

Since 1 January 2025, a small business that follows the Voluntary Small Business Wage Compliance Code cannot be referred for criminal prosecution over an underpayment, even though civil penalties and the obligation to back pay staff can still apply. The Code is essentially a checklist for taking wage compliance seriously: knowing which award applies, checking pay rates and classifications properly, and correcting mistakes when they are found rather than ignoring them.

What to do this week

  • Check that every employee is on the correct award classification for the work they actually do, not just the title on their contract.
  • Reconcile at least one recent pay run against the award or agreement rate, including penalties, allowances and super.
  • Look at the Fair Work Ombudsman's free industrial relations timeline, which lays out recent and upcoming law changes in plain language, so nothing catches you by surprise.
  • If you find an underpayment, fix it and back pay the difference promptly. Acting on your own initiative is treated very differently to being caught.

None of this requires drama. It requires the same habit that keeps most small businesses out of trouble with the ATO: check the numbers regularly, and fix what is wrong before someone else finds it.