New Wage theft legislation passed in Victoria

What is it about?

The Victorian Government has passed a law that will make wage theft a criminal offence with employers facing fines up to up to $198,264 for individuals, $991,320 for companies and up to 10 years’ jail.

The law, set to become the Wage Theft Act 2020 (Vic), will be in effect on the 1^st July 2021 and will target dishonest employers who deliberately underpay or don’t pay their workers and withhold wages and other employee entitlements.

Employee entitlements include wages, salary, allowances and gratuities. It also includes the attribution of annual leave, long service leave, meal breaks, and superannuation.

The legislation will also target employers who falsify employee entitlement records, such as payroll records, or who fail to keep employment records:

A new Statutory Authority

The Wage Inspectorate of Victoria (WIV) will be established as a new statutory authority with powers to investigate and prosecute wage theft offences.

It will educate, promote compliance, investigate possible offences, and bring criminal proceedings in relation to alleged employee entitlement offences, among other things.

Inspectors from the WIV will be authorised to enter a workplace, search and seize any relevant information even without consent from the employer if they reasonably believe that the evidence might be lost or destructed.

How is it different from current legislation, the Fair Work Act?

The key difference between the two legislation is that the Wage Theft Act targets employers with dishonest intent. Employers who make honest mistakes or who exercise due diligence in paying wages and other employee entitlements will not be subject to the legislation.

Some examples of wage theft situations that will be targeted in the new bill:

• not paying retail employees if they work beyond rostered hours when closing up the shop;
• a restaurant ‘charging’ an employee for dropping food or product through a deduction from their wages;
• unapproved ‘training wages’ which result in an employee being paid below award, agreement, or contractually agreed rates;
• unpaid internships at a corporate head office (that is not a vocational placement).

How can I protect my business?

• Wage records should be accurate and kept in accordance to the Fair Work legislation
• Employers should look at their current practices and ensure every employee is paid for all the work they do at the correct rate. The employees’ current role, award, and classification should be reviewed to ensure there is no underpayment. A payroll audit is a great way to discover discrepancies. Talk to us if you believe you might be at risk.
• Ensure your payroll employees are fully aware and trained so that they understand the current legislation and obligation to minimise your risks.

References:

1. https://www.kwm.com/en/au/knowledge/insights/criminalising-underpayments-victorian-wage-theft-bill-2020-20200622
2. http://www.conventuslaw.com/report/australia-victorias-new-wage-theft-bill-what-does/

If you are confused about your obligation as an employer, please book a 15 min free chat with one of our HR Consultants  or call us at 1300 4 ADVICE