Insight · Employment
What Does the Fair Work Ombudsman Do?
Published 27 July 2026
The regulator's powers, how investigations run, and what employers should do when contacted.
In short
The Fair Work Ombudsman is the national workplace regulator. It investigates underpayment, award non-compliance, record-keeping failures and sham contracting; issues compliance and infringement notices; accepts enforceable undertakings; and brings civil penalty proceedings. It is separate from the Fair Work Commission, which is the tribunal that hears dismissal claims.
The Fair Work Ombudsman (FWO) is the agency most likely to knock on an Australian employer's door. It does not resolve unfair dismissal claims — that is the Commission's job — but it does audit, investigate and prosecute businesses that get pay and records wrong.
What the FWO enforces
- Minimum wages and modern award rates, including penalties, overtime and allowances.
- The National Employment Standards — leave, notice, maximum hours, casual conversion.
- Pay slip and record-keeping obligations, which carry their own penalties independent of underpayment.
- Sham contracting — labelling an employee as a contractor to avoid entitlements.
- Enterprise agreement terms.
- Wage theft and serious contravention provisions, which attract substantially higher penalties.
How an investigation runs
- Trigger. An employee complaint, anonymous report, or a targeted industry campaign.
- Request for records. The FWO asks for time and wages records, pay slips, rosters and contracts. Inspectors have statutory powers to enter premises and require documents.
- Assessment. The FWO calculates any shortfall against the applicable award or agreement.
- Outcome. Options range from education, to a compliance notice requiring back-payment, to an infringement notice, an enforceable undertaking (often public), or civil penalty litigation.
Penalties
Penalties are set in penalty units and indexed. Standard contraventions attract penalties per breach for individuals and up to five times that for corporations, with serious contraventions attracting multiples again. Accessorial liability under section 550 means directors, HR managers, accountants and advisers can be personally penalised for their involvement — a point many owners do not appreciate until it is raised.
The five compliance failures we see most
- Paying a flat annual salary without checking it covers all award entitlements, and without the set-off and reconciliation the award requires.
- Treating staff as casuals long after the engagement became regular and systematic.
- Misclassifying employees as contractors — see our contractor guide.
- Poor records: no rosters, no start and finish times, generic pay slips.
- Applying the wrong modern award to the business entirely.
What to do if you are contacted
- Get advice before you reply — early admissions shape everything that follows.
- Preserve every record. Altering or reconstructing records is treated far more seriously than the original breach.
- Run a self-audit across the whole workforce, not just the complainant.
- Rectify underpayments with interest and superannuation, and document it.
- Fix the system — the award mapping, the payroll configuration, the record-keeping — because the FWO will ask what changed.
Where this fits in practice
We run employment compliance reviews, award mapping and contract clean-ups on fixed fees through our advice and compliance service, and support ongoing employers through fractional general counsel.
Frequently asked questions
What does the Fair Work Ombudsman do?
The FWO educates on and enforces compliance with the Fair Work Act, modern awards and enterprise agreements. It investigates underpayment and record-keeping complaints, issues compliance notices and infringement notices, accepts enforceable undertakings, and brings civil penalty proceedings in court.
What is the difference between the FWO and the Fair Work Commission?
The Commission is the tribunal — it hears unfair dismissal and general protections claims, approves enterprise agreements and sets award terms. The Ombudsman is the regulator — it investigates and enforces compliance. Employers frequently send the wrong response to the wrong body.
Can the Fair Work Ombudsman fine my business?
Yes. It can issue infringement notices for record-keeping and pay slip breaches, and can seek civil penalties in court that reach into the hundreds of thousands of dollars per contravention for serious or systematic underpayment, with higher penalties for serious contraventions.
What triggers an FWO investigation?
Usually an employee complaint or anonymous report, but also targeted campaigns in high-risk industries such as hospitality, agriculture, cleaning, security and fast food, and media reporting of underpayment.
What should I do if the FWO contacts my business?
Take it seriously and get advice before responding. Preserve records, do not alter anything, respond within the deadline, and if there is an underpayment, run a self-audit and rectify it — voluntary rectification materially affects the enforcement outcome.
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