The Victorian Government has passed the Wage Theft Bill 2020 which will come into effect from 1 July 2021. The bill is intended to stop the alarming practice of wage theft, where employers found guilty of dishonestly withholding entitlements, wages and superannuation can be fined up to $198,264 for an individual and $991,320 for companies. Officers and individuals can also be imprisoned for up to 10 years if they breach the offence.
The new bill also criminalises offences such as fabricating employment records and dishonest failures to maintain employment records. Dishonesty is defined through an objective test, as it is determined according to the standards of a reasonable person.
A new body known as the Wage Inspectorate will be established, whose purpose will be to oversee investigations into alleged cases of wage theft before referring the offending companies and officers to Victoria Police and the Australian Federal Police. It will be interesting to see how this will play out with the civil investigations and prosecutions done by the Fair Work Ombudsman.
Additionally, the Federal Government is now consulting with key stakeholders to develop national legislation that is likely to include amendments to the Fair Work Act 2009 (Cth) to tackle situations of gross underpayments. It remains to be seen how the two laws will intersect and whether they will conflict, leading to a possibility that the new Victorian laws will be deemed ‘unconstitutional.’ Watch this space as there are sure to be more interesting developments!
- Keep a detailed record of all your employee records. Remember you are required to keep these records for 7 years (even if the employee has left);
- Honest and genuine mistakes will not expose you to criminal liability, it is only if you are dishonest! and
- It is a good idea to conduct regular spot audits of your categories of employees to make sure you are paying correctly, especially as the Awards keep changing.