Labor will Criminalise Wage Theft

An Albanese Labor Government will legislate to criminalise wage theft.

We will consult and work with unions, States and Territories, and employer groups.

We will not undercut or undermine existing State and Territory laws where they currently operate.

Labor has always stood for the protection of wages and conditions of workers in Australia and against their exploitation. 

This includes wage theft which, since the exposure of the shameful practices of the 7-Eleven franchise six years ago, is being uncovered with such regularity and scale that it appears to have reached epidemic proportions.

The Morrison Government has known about this problem for a very long time, and despite repeated announcements that they would act, have still not done so. The Morrison Government could have introduced a standalone wage theft bill a long time ago but instead they cynically chose to include it with industrial relations legislation that would have cut the pay and conditions of Australian workers – something Labor could never support.

The wage theft provisions in the Bill also undercut tougher wage theft laws in Victoria and Queensland.

When the bill got to the Senate Labor voted to amend and salvage the wage theft element of the Bill, but it was the Government with One Nation that voted to ditch their own wage theft laws.

The extent of the problem

A November 2019 report by PwC found that the underpayment of Australian workers’ entitlements was estimated at $1.35 billion per year.

The modelling was based on Fair Work Ombudsman data and found that sectors most at risk included:

  • construction (~$320 million)
  • healthcare and social assistance (~$220 million)
  • accommodation and food services (~$190 million)
  • retail (~$180 million)

This estimate included ~21% of the workforce in the selected industries, or ~13% of the total Australian workforce1

Wage theft appears across a broad range of industries; however, it disproportionately impacts:

  • young people
  • overseas students
  • migrant workers
  • women

A nationwide study involving 5,000 international students found the majority were “experiencing serious wage theft with three in four students earning below the minimum casual wage and one in four earning less than half the minimum”2.

State wage theft laws

Victoria

In June 2020 the Victorian Parliament passed legislation establishing criminal penalties for employers who deliberately underpay or don’t pay their workers.

Employers who dishonestly withhold wages, superannuation, or other employee entitlements, will face significant fines and up to 10 years’ jail.

Offences also capture employers who falsify employee entitlement records, such as payroll records, or who fail to keep employment records.

A wage inspectorate is also being established as a new statutory authority with powers to investigate and prosecute wage theft offences and work is being done to enable employees to recover money owed to them through the Magistrates Court3.

Legislation will commence on 1 July 2021.

Queensland

The Queensland Criminal Code was amended on 14 September 2020 to enable wage theft to be prosecuted as stealing and to increase the maximum penalty for stealing by an employer to 10 years’ imprisonment.

The employer must be shown to have intentionally withheld an employee’s entitlements with an intention to permanently deprive the worker of their property.

Queensland workers are also able to recover their unpaid wages through a simple, quick and low-cost process. Claims for recovery of wages may be made to the Industrial Magistrates Court through the Queensland Industrial Relations Commission Registry4.

References

1. https://www.pwc.com.au/publications/australia-matters/navigating-australias-industrial-relations.html

2. https://rlc.org.au/article/international-students-and-wage-theft-australia-report-highlights-rampant-and-sustained

3. https://premier.vic.gov.au/wage-theft-legislation-passes-victorian-parliament/

4. https://oir.qld.gov.au/industrial-relations/wage-theft/