New laws targeting the upward trend of wage theft in Victoria came into effect on 1 July 2021. The new laws make deliberate underpayment of employees and dishonest withholding of employee entitlements a crime.
What employers need to know
The new laws come with hefty penalties. For individuals, a fine of up to $218,088 or up to 10 years’ imprisonment may be ordered, and for corporations a fine of up to $1,090,440.
The offences include:
- deliberately and dishonestly underpaying employees;
- deliberately and dishonestly withholding wages, superannuation or other employee benefits;
- falsifying records of employee entitlement for financial gain; and
- avoid keeping employee entitlement records to gain a financial advantage.
‘Employee entitlements’ in this context is broad and includes entitlements contained in both modern awards and contracts of employments. Beyond correct wage payments, this may include annual leave, long service leave, care and compassionate leave, meal breaks and superannuation.
The main difference between the new laws and those that stood previously is the requirement for employers to have acted deliberately with a dishonest intent. This is based on an objective assessment rather than a subjective one and may include reckless dishonesty — the ‘burying your head in the sand’ approach. This means that if an employer, exercising due diligence, honestly makes a mistake in their payment of wages or entitlements then this would likely not be considered wage theft.
What employers need to do
Employers need to take reasonable steps to make sure they have an understanding of their responsibilities as an employer, and that their employees are paid correctly, that they provide pay slips and maintain all required employment records. By seeking legal advice, an employer would likely avoid liability as they had undertaken due diligence and acted honestly. This would be the case even if the advice that they had received turned out to be incorrect.
For more information on the new laws, and for advice, please contact a member of our Employment and Workplace Relations team:
|Daniel Bean, Senior AssociateD +61 3 8600 8825|
|Nadeem Hekmat, AssociateD +61 3 8600 8849|
This Employment and Workplace Relations update was authored by Renzo Tweedie, Paralegal.
Note: This update is a guide only and is not intended to constitute legal advice.