Victoria makes wage theft a criminal offence

Australia’s wage underpayment saga has taken a new twist today in Victoria, where Parliament has established criminal penalties for employers who deliberately underpay or don’t pay their workers.

Those who are found guilty of these practices – including the withholding of superannuation or employee entitlements – could face up to 10 years in jail, as well as fines of $198,264 for individuals and $991,320 for companies

The self-reporting of underpayments to the Fair Work Ombudsman (FWO) has become common practice across a wide range of industries, often with admissions of mistakes made over awards and benefits.

The new legislation stipulates that employers who make honest mistakes or who exercise due diligence in paying wages and other employee entitlements will not be subject to these offences.

But the sweeping reforms will make it harder to prove a lack of intent for employers who falsify or fail to keep records, and the Wage Inspectorate of Victoria will also be established as a new statutory authority with powers to investigate and prosecute.

The reforms follow consultations with employer groups and unions, as well as the release of a consultation paper seeking public feedback in February.

Work is also underway on reforms to make it faster, cheaper and easier for employees to recover the money they are owed through the Magistrates’ Court.

“We promised to criminalise wage theft and we have delivered on that promise – employers who steal money and entitlements from their workers deserve to face the full force of the law,” says Victoria’s Attorney-General Jill Hennessy.

“We said we would replace the existing legal regime and make the changes necessary to protect workers from unscrupulous employers and that’s exactly what we’ve done,” adds Minister for Industrial Relations Tim Pallas.

“The establishment of the Wage Inspectorate of Victoria will ensure that employers who do the wrong thing are investigated and held to account,” Pallas says.

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