All employees working in Australia are entitled to a minimum wage and standards of employment. The underpayment of wages and entitlements is a serious social and economic issue affecting workers, businesses and the community. The Fair Work Ombudsman (FWO) conducts audits of small businesses to support them to meet their obligations in relation to award wages and other aspects of labour law. 

This evaluation was designed to test the impact of behaviourally informed variations to FWO’s audits. The re-designed audit processes included simpler communications, planning prompts, and a reminder of the annual wage increase. The different audit processes were evaluated using a 4-arm randomised controlled trial (RCT), involving 1,860 small businesses in the retail and hair and beauty sectors during 2017 and 2018. The trial tested the impact on levels of ongoing compliance, a year after the audit was undertaken. 

The RCT was complemented by a survey of businesses after the audit. FWO’s standard audits improved ongoing rates of compliance with award wage rates. In addition, the behaviourally informed audit (including timely reminders) reduced non-compliance with monetary entitlements by a further 24 per cent (15% versus 19% per cent for the standard audit). Businesses also rated the behaviourally informed audit as more helpful and informative, and less confronting, complex, and confusing. As a result, employers completed these audits more quickly: taking 15 days compared with 23 days for the standard audit.