Wage theft enshrined in Federal legislation

Wage theft enshrined in Federal legislation

Wage theft enshrined in Federal legislation

The Federal government has achieved the passing of legislation enshrining wage theft in the Fair Work Act 2009, secured on the last sitting day of Parliament for the year with the support of prominent senators David Pocock (Independent) and Jacqui Lambie (Jacqui Lambie Network). In a surprise move, the government elected to split their proposed Changing Loopholes Bill into two parts to secure the support of the cross benches.

Under the legislative provisions, which passed the Parliament in late 2023, an employer convicted of ‘intentional wage theft’ could face up to 10 years imprisonment.

The maximum fines that courts will be able to impose on a company will be three times the underpayment or 25,000 penalty units, which is currently $7,825,000. For an individual, the maximum fine is three times the underpayment or 5,000 penalty units, which is currently $1,565,000.

In simple terms, ‘wage theft’ occurs when an employer fails to pay an employee their correct wages and entitlements under a relevant Modern Award or a prevailing enterprise bargaining agreement.

Employees may commit wage theft in a number of ways, including:

  • Paying less than the minimum wage;
  • Failing to allow the taking of paid breaks;
  • Refusing to pay overtime;
  • Failing to pay prescribed overtime or penalty rates;
  • Not paying superannuation contributions or underpaying contributions;
  • Unlawfully deduction amounts from wages;
  • Paying ‘cash in hand’;
  • Offering unpaid work, including unpaid internships.

The Federal government has insisted that the legislation will not impose penalties on employers who make ‘honest mistakes’.

Rather, it is designed to penalise employers who purposely and intentionally commit wage theft at the expense of their employees.

Contractors that don’t invest in compliance are operating without a seatbelt. Workforce Advisory can assist with seatbelt issues for you and your subcontractors. 

Closing Loopholes – Department of Employment and Workplace Relations, Australian Government

For queries about wage theft, allegations of underpayments, or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 0417 622 178, 1300 WAL LAW or via email to dean.cameron@workforceadvisory.com.au

Disclaimer: This information is provided as general advice on workplace relations and employment law. It does not constitute legal advice, and it is always advisable to seek further information regarding specific workplace issues. Liability limited by a scheme approved under professional standards legislation.

Ref: 412.0224

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