Each year thousands of workers become victims of wage theft in Australia. Following the 2018 inquiry into wage theft, amendments were made to the Queensland Criminal Code. These amendments to wage theft law state that employers in Queensland who intentionally fail to pay their employees will be subject to criminal penalties of up to 10 years’ imprisonment. It is now more important than ever to ensure that your business is complying with legal requirements.
Key points to remember
- Wage theft in Australia is the deliberate denial and wages or employee benefits.
- Employers will be faced with penalties of up to ten years’ imprisonment for failure to pay employees under recent amendments to the Queensland Criminal Code wage theft law.
- Ensure that your business is complying with its obligations by keeping up to date with current award rates and legislation.
What is wage theft?
Wage theft is the denial of wages or employee benefits that are rightfully owed to an employee. This includes the deliberate underpaying of wages; deliberate withholding of leave and penalty rates; or deliberate failure to make required superannuation contributions on the employee’s behalf.
What are your obligations as an employer?
Worker’s rights and entitlements are protected by State and Commonwealth wage theft law. The minimum entitlements include:
Minimum rates of pay and Award rates
It is essential that you comply with the minimum pay rates set out in the relevant award, enterprise agreement or other registered agreement. If these do not apply to your business, employees must be paid at least the national minimum wage, which is set each year by the Fair Work Commission. For more information, visit the Fair Work Commission.
National Employment Standards
The National Employment Standards (NES) refer to minimum entitlements including paid annual leave, sick leave and public holidays, which you must provide to your employees.
Employers are required to make superannuation contributions for eligible employees at least every three months. The minimum superannuation – referred to as the super guarantee – is currently 9.5% of an employee’s ordinary time earnings. For more information, visit the ATO website.
Wage Theft Bill 2020
In June 2020, the Parliament of Victoria passed the Wage Theft Bill 2020 – becoming the first Australian jurisdiction to criminalise wage theft in Australia. This Bill imposes criminal penalties on employers who fail to pay all employee entitlements or falsify employee entitlement records, targeting employers who dishonestly withhold wages and other employee entitlements.
The Victorian Government are seeking to crack down on this type of conduct and have proposed hefty penalties. Companies that commit the proposed offences would be liable for up to $991,320, while non-compliant individuals would face fines of up to $198,264 and imprisonment of up to 10 years.
The Wage Theft Bill 2020 can be accessed via the Legislation Victoria website.
Wage theft is now a criminal offence in Queensland
The 2018 inquiry into wage theft in Queensland found that approximately 1 in 5 workers were being underpaid, amounting to approximately $1.2 billion in unpaid wages and more than $1 billion in superannuation entitlements. In response to this enquiry, the Queensland Criminal Code was amended on 14 September 2020 to classifywage theft as a crime which can be prosecuted as an offence of stealing or fraud.
Employers who commit wage theft will face a 10 year maximum imprisonment term for stealing, or a 14 year maximum imprisonment term for fraud. But it is not all doom and gloom for employers. Employers who have exercised due diligence or have made honest mistakes when paying employee wages and entitlements will not be liable under the proposed legislation.
Regardless, it is paramount that employers implement practices which ensure that all employee entitlements are paid correctly to reduce the risk of being subject to these criminal penalties.
Further information about employees, pay and entitlements may be found on the Queensland Government website.
How can you ensure your business is compliant and protected from liability?
The best ways to ensure that your business is compliant is to:
- Understand your obligations. To avoid underpayments of staff, it is essential to understand your obligations in relation to minimum rates of pay, National Employee Standards and superannuation.
- Review pay rates. Ensure that you are paying your employees correctly under the relevant Award. If you are unsure which Award applies to an employee, you should contact the Fair Work Ombudsman. Awards may be amended from time to time so it is important that your business is aware of any changes to pay rates or employee entitlements under the relevant Award.
- Keep accurate records. Keep detailed payroll records to ensure that all entitlements have been correctly paid to your employees.
- Keep up to date with new or amended wage theft legislation in your state.
- Audits. If you are unsure of your obligations, you should engage a third party to conduct an audit
If you are concerned about your business’ possible compliance issues or liabilities, you should seek legal advice. Legal Kitz employment specialists can assist you with implementing best practice methods to ensure that your business remains compliant with any new or amended wage theft legislation and regulations.
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The above information has been collected from relevant government websites and is subject to change. For the latest information regarding new or amended legislation, please refer to state and federal government websites.