Cooperation agreements

An employer who self-reports conduct that could be a criminal underpayment offence can request to enter a cooperation agreement with us. We won’t refer any conduct covered by a cooperation agreement for criminal prosecution.

On this page:

The information on this page applies from 1 January 2025.

What is a cooperation agreement

A cooperation agreement is a written agreement between us and someone (such as an employer, business or individual) who has told us they’ve engaged in conduct that may amount to the criminal underpayment offence.

From 1 January 2025, intentional underpayment of wages or entitlements can be a criminal offence. This doesn’t include honest mistakes.

While the cooperation agreement is in force, we can’t refer conduct outlined in that agreement for possible criminal prosecution. We may still consider civil enforcement options if necessary.

Example

A large fast food restaurant business was experiencing cash flow issues. To save money, one of the business’s store managers, Joe, intentionally didn’t pay penalty and overtime rates to his team that are required by the enterprise agreement.

Business management discovers Joe’s actions and that employees have been underpaid. The business plans to repay their employees what they’re owed. They’re concerned about possible criminal prosecution.

The business tells us what happened and that they are committed to repaying their employees and improving their payroll and time recording systems. They request to enter into a cooperation agreement with us.

Request to enter a cooperation agreement

We’re currently developing a guide that will explain the cooperation agreement process. This will include how to request to enter into a cooperation agreement with us. Check back regularly for more information.

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Tip - Small business employers entering cooperation agreements

If we are satisfied that a small business employer who has underpaid an employee has complied with the Voluntary Small Business Wage Compliance Code, then we can’t, in relation to that conduct:

  • refer them for possible criminal prosecution, or
  • enter into a cooperation agreement with them.

Learn more about the Voluntary Small Business Wage Compliance Code.

We assess cooperation agreement applications on an individual basis.

We may ask for evidence to support our assessment of whether a cooperation agreement is appropriate.

We’ll consider information provided by the person, as well as other sources of information available to us.

Check the Guide, when available, to learn more about the factors we’ll consider.

What a cooperation agreement does

A cooperation agreement stops us from referring an employer for possible criminal prosecution for intentional underpayments.

It doesn’t affect any of our other powers or functions, or the powers of our inspectors. We may still consider civil enforcement options if necessary, such as a:

Source reference: Fair Work Legislation Amendment (Closing Loopholes) Act 2023, ss 717A – 717G.

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