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Wage theft can now lead to 10 years in jail in Victoria

Image of male barista in cafe
Photo by ZACHARY STAINES on Unsplash
Image of male barista in cafe
Photo by ZACHARY STAINES on Unsplash

A bill penalising the act of deliberate wage theft with up to 10 years in jail passed in Victoria on Tuesday, turning up the heat on what has been a long simmering issue in the retail industry.

The Wage Theft Bill 2020 could it employers who dishonestly withhold wages, superannuation or other entitlements with fines of up to almost $200,000 for individuals, and $1 million for companies.

The Minister for Workplace Safety Jill Hennessy said, when introducing the bill in March, that employers that make honest mistakes will not be guilty of wage theft offenses under these laws.

“Employers who steal money and entitlements from their workers deserve to face the full force of the law, which will include substantial fines or jail time for the worst offenders,” Hennessy said.

 “This problem is systematic – that’s why our laws will apply beyond wages and include allowances, gratuities, superannuation and other accruals such as leave, as well as ensuring directors and officers are held to account.”

Examples of underpayments in recent memory range from hospitality group Rockpool to retail firms Super Retail, Woolworths, Coles, Wesfarmers, and many, many more. Many of these cases have stated the Modern Award is overly complex, leading to difficulty ascertaining who should be paid what, and when.

National Retail Association chief executive Dominique Lamb condemned the Victorian Government for the move, stating it would burden retailers with unnecessary regulations during a period of economic turmoil.

“No business should ever underpay their workers a single cent. Fortunately, there are already robust federal laws in place that provide the Fair Work Ombudsman with powers to investigate, enforce and penalise wage underpayment and this has been highlighted by several high-profile cases in recent times,” Lamb said.

Australian Industry Group chief executive Innes Willox also opposed the bill, questioning whether it was even constitutionally valid. 

“Underpayments – deliberate or unintentional – are comprehensively addressed in the Commonwealth’s Fair Work Act 2009,” Willox said. 

“Labelling certain types of underpayments as ‘wage theft’ does not change the character of, or the purpose of, the Victorian legislation.”

The Victorian Minister for Industrial Relations Tim Pallas said, however, that the existing legal regime had failed to stop exploitation of workers and that employees shouldn’t have to complain to be paid properly. 

In order to facilitate this, the bill also introduced the Wage Inspectorate Victoria –  a corporate body that will act to “promote, monitor and enforce compliance with this Act”.

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