Wage theft in Victoria: a criminal offence

As businesses commence the slow transition back to the new normality, Victoria has added a twist to Australia's wage underpayment saga; introducing criminal penalties for employers who dishonestly withhold wages, superannuation or other employee entitlements.

The Andrews Labour Government's sweeping new reforms will see guilty employers facing fines of up to $198,264 for individuals, $991,320 for companies and up to 10 years’ gaol. The legislation also captures employers who fail to keep employment records, falsify such records or conceal wage theft.

Wage theft is a long-standing issue in the Australian workplace scene. A 2019 report by KPMG, estimated the annual figure for wage theft at over $1.35 billion Australia wide, with an estimated 13 per cent of the total workforce being impacted (over a million people).

The new legislation establishes the Wage Inspectorate of Victoria, a statutory authority tasked with investigating and prosecuting wage theft. As a means of enforcement, work is underway to make it faster, cheaper and easier for employees to recover their owed entitlements via the Magistrates' Court.

While the fines and potential gaol time seem hefty, those employers who make honest mistakes or who exercise due diligence in paying wages and other employee entitlements will not be subject to penalties.

In line with honest mistakes, self-reporting by employers of underpayments to the Fair Work Ombudsman (FWO) has become common practice in a range of industries, with many employers making admissions to award and benefit mistakes.

Our business lawyers can help you stay on track as you navigate the complex Australian employment scene and stay on top of your obligations as employer. Contact Siobhan Liston on 03 5445 1067 or Lachlan Edwards on 0427 916 442.