Victorian business the first to face criminal wage theft charges
A Melbourne restaurant is the first Australian business to face prosecution over wage theft following allegations that it withheld more than $7000 in wages, penalty rates and superannuation from its employees. The Wage Inspectorate Victoria has brought 94 charges against the business and is the first case where they have exercised their right to pursue criminal proceedings.
Wage Theft Act 2020
The Wage Theft Act 2020 (Vic) (Victorian WTA) commenced operation on 1 July 2021 and applies to all employers and employees in Victoria.
Under the Victorian WTA, employers, directors and managers who deliberately underpay workers may face imprisonment and companies may be fined. There is a defence in the legislation for employers, directors and managers who can prove that they exercised due diligence when paying employees.
Employers should ensure that they have the right systems in place to ensure compliance with relevant workplace laws, regulations and awards.
What is wage theft?
Under the Victorian WTA, it is a crime for an employer in Victoria to:
- deliberately underpay employees;
- dishonestly withhold wages and/or other entitlements;
- falsify or avoid keeping employee entitlement records to gain a financial advantage.
Honest mistakes made by an employer that exercise due diligence are not covered by the criminal offences.
Powers of Wage Inspectorate Victoria
Wage Inspectorate Victoria has been established to promote and enforce the Victorian WTA and some other Victorian workplace laws.
The legislation gives Inspectors powers to:
• enter premises;
• obtain information and documents;
• seize evidence;
• require a person to give evidence or answer questions under oath or affirmation; and
• apply for and execute search warrants.
If Wage Inspectorate Victoria believes that a wage theft offence has been committed, they can:
• issue a formal written warning;
• accept an enforceable undertaking;
• pursue criminal proceedings; or
• refer indictable matters to the Office of Public Prosecutions for advice and criminal prosecution.
Key takeaway for businesses
This is not an issue that only concerns Victorian businesses. Amendments made to the criminal code in Queensland effectively operate as wage theft laws and other states have indicated that wage theft laws may be introduced in their jurisdictions.
Employers in other states should not be complacent. Although wage theft laws may not apply in other jurisdictions, the Fair Work Ombudsman has powers to investigate and prosecute and underpayment claims are one of their priorities.
How can employers ensure that they are paying their workers correctly?
It is recommended that employers regularly check their award compliance obligations. For example, when an employee changes jobs, check whether that will result in a change to their award coverage.
An annual audit can be helpful to ensure employees are receiving at least the minimum rate that they are entitled to under the relevant award. A good time to complete the audit may be around the time that the Fair Work Commission hands down their Annual Wage Review decision (usually around June-July each year).
Employers can subscribe to receive updates relating to their award either via the Fair Work Ombudsman website or the Fair Work Commission website.
To read more about wage theft in Victoria go to: Victoria's wage theft laws | Victorian Government (www.vic.gov.au)
For assistance with determining award coverage: