Australia’s Labour government will introduce legislation to close “loopholes” in workplace law, a move opposed by employer groups fearing higher costs.

Workplace Minister Tony Burke has introduced a bill making it a criminal offence to deliberately underpay workers, with a maximum penalty of 10 years in jail and a maximum fine of $5.0 million.

Penalties would not apply to employers who make honest mistakes, Burke said in a statement.

The Australian Retailers Association (ARA), warned the Closing the Loopholes Bill will “increase complexity for employers without any upside in terms of productivity, job creation or workforce participation”.

Details of the legislation have not been released. Burke said in a speech last week that in addition to criminalising “wage theft”, the bill would make it easier for casual workers to gain permanent roles, scrutinise the use of labour hire firms to undercut minimum pay rates, and introduce minimum standards for “gig economy” workers, including in food delivery and rideshare apps.

He said on Sunday in an interview with the Australian Broadcasting Corporation the impact on business would be minimal, although “there are some people who will have to pay more”. Businesses with fewer than 15 employees would be exempt from some provisions, he said in a statement.

ARA CEO Paul Zahra said the ARA supports an equitable and balanced workplace relations system, but “the government should be simplifying the workplace relations system, not complicating it further”.

“The Bill fails to meet that test, and our key concerns relate to the changes for casual workers and underpayment of wages. 

“We see the benefits of a more permanent retail workforce, but our members say there are currently very low levels of casual conversion. This Bill means there is going to be a lot more administrative work for employers without any material change in casual conversion rates.”

Business Council of Australia CEO Jennifer Westacott called proposed changes “unworkable” on Friday, telling Sky News, “It’s going to add to cost, add to complexity, make it harder to get casual work, make it harder to employ people”.

The Australian Chamber of Commerce and Industry has said the law will restrict independent contracting and threaten the viability of online food delivery and rideshare services.

• Reporting by Kirsty Needham; Editing by William Mallard, of Reuters.