Wage Theft Is Now Law – Don’t Get Caught Out!

In Victoria, from 1 July 2021, it becomes a crime to:

• deliberately underpay workers
• dishonestly withhold wages, superannuation or other employee entitlements
• falsify employee entitlement records to gain a financial advantage
• avoid keeping employee entitlement records to gain a financial advantage

These crimes are punishable by a fine of up to $198,264 or up to 10 years’ jail for individuals and a fine of up to $991,320 for companies.

Victoria’s wage theft laws target employers who deliberately and dishonestly withhold wages and other worker entitlements.

Honest mistakes made by employers who exercise due diligence in paying wages and entitlements are not considered wage theft.

What is defined as an Entitlement?

For some clarity, wage entitlements include

• Wages or salary
• Allowances & gratuities
• Annual leave
• Long service leave
• Meal breaks
• Superannuation

Employers must provide their employees with at least the minimum pay and conditions outlined in the relevant award, workplace agreement, contract of employment or legislation.

The minimum pay rates and conditions in awards, legislation, and registered workplace agreements cannot be overridden by a contract or by an agreement with the employee that provides for less beneficial entitlements.

Who can be held responsible?

Wage theft offences/charges can apply to;

• directors
• office holders
• partners
• people who may make substantial business decisions on behalf of the employer

Ignorance of the law is no excuse and choosing not to pay an employee an entitlement they have under an award, legislation or registered workplace agreement may be considered wage theft.

What does wage theft look like?

Examples of this might be

• not giving workers meal breaks or paying the appropriate wages if meal breaks aren’t given
• not paying penalty or overtime rates for extra hours worked
• not paying specific allowances
• altering timesheets to not show true hours worked
• instructing staff not to record all hours worked on wage records

Payroll regulations are quite complex and we highly encourage all employers to undertake an audit on their payroll systems now to ensure you are in compliance.

Further information can be found at https://www.vic.gov.au/victorias-wage-theft-laws