Wage theft is now a criminal offence in Victoria
06 July 2021
Did you know that wage theft is now a criminal offence in Victoria and can result in hefty fines and jail time?
While proposed wage theft reforms did not make it into the Federal Government’s industrial relations bill passed in March 2021, in Victoria the Victorian Wage Theft Act did come into effect on 1 July 2021.
According to VCCI, prior to 1 July 2021, a business underpaying an employee may have found themselves investigated and prosecuted by the Fair Work Ombudsman, for contraventions of the Fair Work Act 2009 (Cth). Now, a business may also be pursued by the Wage Inspectorate and subject to more severe penalties.
It is now more important than ever that as an employer you are aware of your obligations and ensure compliance with workplace laws.
Honest mistakes made by employers who exercise due diligence in paying wages and entitlements are not considered wage theft.
What’s changed in Victoria?
Introduced last year, the Victorian Wage Theft Act 2020 came into effect on 1 July 2021 making wage theft a criminal offense in Victoria.
As outlined on the Victorian Government website, on 1 July 2021, it became a crime for an employer in Victoria to:
- deliberately and dishonestly underpay employees
- deliberately and dishonestly withhold wages, superannuation or other employee entitlements
- falsify employee entitlement records to gain a financial advantage
- avoid keeping employee entitlement records to gain a financial advantage
The new laws differ from the underpayment provisions in the Fair Work Act in that they would require dishonest intent for employers to be found guilty. Employers who make honest mistakes or perform due diligence will not be found guilty under these laws, but they could still face penalties or prosecution by the FWO.
What is the Wage Inspectorate Victoria?
A new Government body called the “Wage Inspectorate Victoria” (WIV) has been set up with powers to investigate and prosecute wage theft offences. Among other things, inspectors can exercise entry, search, and seizure powers. They can also require a person to answer questions or produce documents.
In addition to the wage theft laws, Wage Inspectorate Victoria promotes and enforces Victoria’s:
- child employment laws
- long service leave entitlements
- owner driver, forestry contractor, hirer and freight broker obligations.
What are the penalties?
Wage theft crimes are punishable by a fine of up to $218,088 or up to 10 years’ jail for individuals and a fine of up to $1,090,440 for companies.
What should our business do?
As an employer, you need to be aware of your obligations and ensure compliance with workplace laws.
Directors and officers of companies should pro-actively assess whether employees have been paid correctly in accordance with their applicable award, agreement and/or contract of employment and that accurate employee records are being kept and maintained.
Employers should be aware that new offences include the dishonest withholding of employee entitlements, the falsification of employee entitlement records and a failure to keep updated employee entitlement records.
Need IR expert advice?
As HR experts, Horner understands award interpretation and can provide help and guidance to your organisation.
Horner has a full time in-house IR expert available to consult with you and is also a member of the Victorian Chamber of Commerce & Industry (VCCI).
For assistance or guidance on wage theft or award interpretation matters, contact Darren James on 0417 519 669 or Kylie Heffernan on 0409 336 418 or email horner@horner.com.au.