Wage Theft in the Workplace
By
Allyson Fletcher
Business Improvement Human Resources News
We all know that employers get upset when their employees fail to work hard and/or waste time during working hours. They also get upset when an employee fails to work their full hours for the day/shift as contracted/rostered. Slow or not enough work performed by employees also leads to lower productivity which has a financial impact on an employer. It can also be a sign of a poor culture within the workplace where employees aren’t working well or proficiently. This can become a bigger issue for the employer as the employee will be committing wage theft which is a criminal act and punishable by law. The employee can be terminated for serious misconduct as a result of this fraudulent act, as well as potentially getting a criminal record. The employer will then be left to find a replacement for that employee and if the culture isn’t the greatest to begin with, this can potentially become a never-ending merry-go-round ride.
Serious consequences, right? But what happens when an employer deliberately doesn’t pay an employee what they are entitled to? Who helps employees when they have been underpaid? Underpayment of wages by employers can also be classified as wage theft. Apart from Victoria and Queensland which already have legislation in place for these offences, there are currently no laws that make underpayments by employers a criminal offence.
The Employment and Workplace Relations Minister, the Honourable Mr Tony Burke, has put forward to parliament a drafted Bill, Fair Work Amendment (Closing Loopholes) Bill 2023 with the intention to amend current laws relating to various workplace relation issues, including the proposal of making wage theft by employers a criminal offence right across the country. The proposed new federal wage theft laws will mean greater penalties for businesses, larger fines for businesses, as well as the potential for a 10-year jail sentence for a company director found guilty of deliberately underpaying their staff. The proposed fines under this Bill are quite significant and can be as high as $1,565,000.00 for an individual and $7,800,000.00 for a corporation, as well as the possibility of a Company Director spending 10 years behind bars for employers.
Under the proposed Bill, the Fair Work Ombudsman (FWO) will be given the power to investigate and target companies who are deliberately doing the wrong thing by their employees by not paying the employees their full entitlements. If the Bill passes through Parliament, the intention is for the Bill to be rolled out nationally. The FWO will reference any Fair Work instrument, including any of the 130+ Awards to help them determine whether a business has deliberately underpaid its staff.
Do you want to be known as a workplace with a bad culture stemming from senior management downwards? Are you confident that your business is paying its employees correctly? Do you have a dedicated and fully trained payroll officer who understands the intricacies of the Fair Work instruments that apply to your business? Now is the best time (the present time is always the best time) for businesses to ensure that they are meeting all of the requirements for their employees. Fair Work Inspectors already have the authority to enter the premises of employers, without force, to review records and documents. Would you be confident if a Fair Work Inspector were to walk through your doors that they wouldn’t be identifying any problem areas?
Key Business Advisors can help your business by conducting a wage audit to ensure that the employees are being paid correctly, as well as identifying correct Modern Award(s) for your team where relevant. Plus we can review any EBA you may have in place, as well as ensure that all non-award employees are also being paid appropriately.
Please contact us on 1300 4 ADVICE for a free 15-minute consultation where we can help provide you with further information.
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