Federal Government to Introduce Criminal Wage Theft Laws

The Federal Government is currently in talks with unions, employer groups, and states and territories to develop new federal criminal wage theft legislation. These proposed laws will introduce prison sentences for the worst cases of employer wage theft and complement criminal wage theft laws that have already been implemented in Victoria and Queensland since 2021.

Making wage theft a criminal matter is intended to convey a strong message to employers that compliance with workplace entitlement laws should be an ongoing priority of their businesses. This strong stance follows a slew of recent underpayment claims brought by the Fair Work Ombudsman against employers including Coles and Woolworths, where the Ombudsman have sought to highlight the importance of correct wages.

The Government’s proposed wage theft legislation is expected to be comprehensive and will cover a range of offenses relating to the minimum wage, penalty rates, and overtime. Potential criminal charges will also extend to employers who falsify records, fail to keep accurate records, or make misleading statements about their employees’ entitlements.

However, employers should not think that penalties for underpayment are not already enshrined in law. The ‘Secure Jobs, Better Pay’ legislation introduced last year included provisions banning job advertisements displaying rates of pay lower than the relevant Modern Award.

Key Takeaway

Correctly paying employees is more important now than ever before. It is important for employers to be paying their workers appropriately under the relevant Modern Award. This means not only paying the legal minimum hourly rate, but also the correct overtime pay and any relevant allowances. Employers must also ensure they are keeping accurate pay records.

Employers are encouraged to seek legal advice prior to engaging any new workers. If you have any questions about overtime wages or modern award compliance, please do not hesitate to contact Nick Stevens, Peter Hindeleh, Daphne Klianis or Josh Hoggett.