Victorian “Wage Theft” laws place unhelpful administrative and legal burden on business

The Australian Retailers Association (ARA) has criticised the Victorian Parliament for passing The Wage Theft Bill 2020, which adds unnecessary and unhelpful red tape on business during a time when many are fighting to survive and recover.

ARA CEO, Paul Zahra, condemned the passage and timing of these wage laws, stating that the legislation does not address the root cause of underpayments and fails to take into account the work being done on this topic at the Federal Government level.

“It is disappointing that despite strong and legitimate concerns from industry associations and employers, the Victorian Parliament has proceeded to pass this legislation. The ARA unequivocally condemns the deliberate underpayment of employee wages. However, from our experience, most businesses strive to do the right thing by their employees and ensure that they are paid correctly. The Victorian legislation is misguided as it fails to acknowledge and address the core reason as to why many underpayments occur.

“It is clear that the complexity of the industrial relations system is a significant cause of the underpayment cases we have seen to date and we applaud the review initiated by Prime Minister Scott Morrison into the industrial relations system, which will also consider the adequacy of the compliance and enforcement framework. The passage of the Victorian legislation prior to the completion of this federal review is unreasonable and puts at risk real progress on how best to address this topic. Businesses do not need multiple layers of legislation on this issue as it only causes further complexity and confusion and that can be costly.”

Mr Zahra also raised concerns about the impact of the legislation on the willingness of employers in Victoria to self-report instances of underpayment and the possible double punishment from the duplication with the federal system.

“Introducing criminal penalties for wage underpayments (of up to 10 years’ jail) will not only discourage employers from growing their business and employing new staff, but will likely disincentivise them from coming forward and self-reporting any underpayments, which is in no one’s interests.”

“The Federal Fair Work Ombudsman already has the power to pursue and penalise employers for wage underpayments and we hold considerable concern around the constitutional validity of the Victorian legislation,” he said.

“The legislation adds another level of business red tape and anxiety during a time when most businesses are focused on retaining their employees and resuming normal operation.”

“The key focus should be on repairing the system rather than purely punishment, and providing targeted assistance to make it as simple as possible for employees and employers to know their rights,” said Mr Zahra.

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