January 1 changes your small business and startup should know

The new year will bring updated rules and regulations for small businesses and startups across the economy.

Here’s what you should know to prepare for business in 2025.

Criminal charges for wage theft

The intentional underpayment of wages will become a criminal offence from January 1.

For companies, penalties will reach either:

• The greater of three times the amount of underpayment and $7.825 million, or,
• If the courts can’t determine the value of underpayment, $7.825 million.

And for individuals, available penalties include:

• Up to 10 years in prison,
• The greater of three times the amount of underpayment and $1.565 million, or,
• If the courts can’t determine the value of underpayment, $1.565 million.

However, small businesses that underpay their employees will not be criminally prosecuted if they adhere to a new Voluntary Small Business Wage Compliance Code.

The Code is expected to provide ‘best practice’ directions, helping small businesses improve their payroll processes and avoid the most common pitfalls.

The Code is yet to be released.

Mandatory climate-related disclosures

It will become mandatory for Australia’s biggest companies to make climate-related financial disclosures from January 1, 2025, with their first sustainability reports due on June 30, 2026.

There will be no immediate ramifications for SMEs and early-stage startups, which are shielded from the reporting requirements by large turnover and asset thresholds.

But from the second year, each large business that makes climate-related disclosures will need to tally its Scope 3 emissions — meaning greenhouse gas emissions caused by other businesses in their supply chain.

This means that in years to come, SMEs and startups servicing larger business customers may be asked to provide evidence of their own greenhouse gas emissions.

The Australian Sustainability Reporting Standards underpinning those rules say reporting entities need not take “undue effort” in categorising their emissions, but some smaller suppliers could face more paperwork and carbon accounting requirements.

Tax agent reforms

New obligations for registered tax and BAS agents come into play from January 1.

Tax agents with 100 employees or less are exempt, and will face the new rules from July 1, 2025.

The rules, brought forward by Assistant Treasurer Stephen Jones in response to the PwC scandal, impose new ethical standards on top of the sector’s Code of Professional Conduct.

These include rules regarding:

• false or misleading statements made by clients,
• keeping clients informed of matters that may influence their decision to use a tax agent,
• upgraded record-keeping duties.

The Tax Practitioners Board, which oversees the sector, has released draft information sheets for tax agents as it finalises its guidance materials.

Changes to awards

Some modern awards allow employers to pay staff below the National Minimum Wage if they are in the very first stage of employment.

But those awards will change from January 1, ensuring those ‘introductory’ classifications — intended to cover processes like staff induction and rudimentary training — last no longer than six months.

Pay rates for some award levels will also kick in from January 1.

Employers and employees can assess those upcoming changes on the Fair Work Ombudsman’s Pay and Conditions Tool.

Key changes for Western Australian employers

There are a few other changes that will be taking place at the end of January.

A cluster of changes affecting employers in Western Australia will commence on January 31, as a result of the new Industrial Relations Legislation Amendment Act 2024.

Many of the changes align state employment laws more closely with federal law.

They include:

• A new and objective test of what constitutes casual work, assessing the “real substance, practical reality and true nature” instead of contract terms alone,
• A new express prohibition on sexual harassment in relation to work, in line with federal laws,
• Increasing civil penalties for both companies and individuals for contravening state employment laws,
• Casual loadings for the state minimum wage rising from 20% to 25%,
• Enabling employees with at least 12 months’ service to request flexible working arrangements under certain criteria, among other changes.

Employers can learn more here.

More specifically, new rules are coming for WA hairdressers operating under the state Hairdressers Award.

Some of the changes are minimal, but others will have major ramifications for how hairdressers and beauty industry workers operate.

They include:

• Expanding the award to cover beauty industry employees and renaming the award to the Hair and Beauty Industry (WA) Award,
• New classifications for hairdressing salon assistants, trainees, and beauty industry employees,
• Changes related to paid and unpaid leave,
• Amended termination rules,
• Changes to ordinary hours of work, reflecting expanded operating hours.

Hairdressers and beauty Industry workers can access a state government factsheet here.

New Vehicle Efficiency Standard

New rules for car importers, encouraging the adoption of fuel-efficient vehicles, kicks in from January 1.

The New Vehicle Efficiency Standard will not stop Australians from buying internal combustion cars or 4WDs, nor will it prevent car manufacturers from offering those new models.

However, it will impose an average CO2 target across the fleet of vehicles each car manufacturer offers in Australia.

If a manufacturer sells vehicles with high CO2 emissions, it will need to offer more efficient vehicles to balance out the average.

Manufacturers that perform above the New Vehicle Efficiency Standard will earn credits, which they can trade with underperformers.

More details are available on the Department of Infrastructure, Transport, Regional Development, Communications and the Arts website.

Engineered stone importation ban

The import of engineered stone benchtops, slabs and panels will be banned from January 1.

The domestic use, supply, and manufacture of those products was banned earlier this year.

Both bans respond to evidence that cutting and processing engineered stone produces airborne particles responsible for the devastating lung disease silicosis.

New QLD electrical safety rules

Queensland will face fresh safety standards for conducting work near electrical equipment and in ceiling spaces.

From January 1, existing rules regarding working ‘on’ electrical equipment will expand to cover work ‘near’ (within three metres of) said equipment.

And workers will be prohibited from working in the ceiling space of a domestic building unless they turn off relevant electrical installations.

Penalties will apply for businesses bending those rules.

More details can be found at WorkSafe Queensland.

Expanded NSW plastics ban

NSW will expand its ban on certain disposable plastic products from next year, targeting what it calls ‘integrated packaging’ products.

These products include single-use plastic spoons and straws that might come attached to a juice box or single-serve yoghurt lid, and certain polystyrene cups containing instant noodles.

The sale of those products is prohibited from January 1, unless a business receives an exemption.

More details can be found on the NSW EPA website.

Tasmania sheep and goat electronic identification

And in significant news for farmers in Tasmania, sheep and goats born after January 1 must be fitted with an electronic identification tag (eID) before leaving the property of their birth.

The movement of tagged animals must be noted on the National Livestock Identification System database.

The update is intended to identify and track livestock in case of a disease outbreak.

Farmers can learn more on the Department of Natural Resources and Environment Tasmania website.

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