The worker paid money back to the firm – then got pay slips ruled false or misleading
A Sydney accounting firm made a worker pay her own wages back to it – and a court has now penalised it $148,000.
The decision, handed down on August 27, 2026 in the Federal Circuit and Family Court of Australia, dealt only with penalties. The firm, Innovative Associates, and its sole director had already admitted the breaches. The court’s job was to set the price.
The employee worked as an assistant accountant from July 2019 to December 2020. She held a temporary graduate visa and a bachelor’s degree in accounting. For the first stretch of her employment, the court found, she was not paid at all.
What followed was what the agreed facts called a “cashback” scheme. The director required her to pay money to him or the firm. Those funds were then moved through a company account and paid back to her, so the transfers looked like salary. On the agreed facts, the arrangement was set up to make it appear she was being paid when, in reality, she was not.
The paperwork matched the appearance. The firm gave her 14 pay slips the court found were false or misleading – each showing the same monthly net figure while the hours varied, and most carrying payment dates that did not line up with when money actually moved. When a Fair Work Inspector began investigating in June 2021, the firm produced those pay slips to the regulator – documents it knew were false or misleading.
The court decided the case on the written material, without a hearing, after both sides agreed to that approach. The admitted breaches, in plain terms, were: keeping no proper records, handing over pay slips late, giving false or misleading pay slips, giving false or misleading documents to an inspector, failing to pay in full and at least monthly, paying below the minimum wage, not paying public holiday and annual leave entitlements, and unreasonably requiring the worker to pay money for the firm’s benefit.
The underpayment came to $40,164.49. It was repaid in instalments between June 2023 and July 2025 – about two and a half years after the first breach, and two years after the investigation began. The court accepted the money was repaid, but pointed to that delay, and to the false documents given to the regulator, as reasons the penalty had to send a clear message.
The firm was ordered to pay $148,000, in eight monthly instalments of $18,500. The director was ordered to pay $29,000 himself, within 28 days. The court found the conduct was deliberate and held the director responsible as the firm’s sole director, secretary and shareholder.
For HR and payroll teams, the case is a clean marker of where personal liability sits. Under the Fair Work Act, a director or manager who is knowingly involved in a company’s breaches can be penalised personally, separate from the business – and repaying the money late does not erase the penalty. Record-keeping mattered too: because the firm kept no proper records, the law shifted the burden onto it to disprove the underpayments, and the false documents given to the inspector drew a substantial penalty of their own.
