Understanding New Employment Regulations: Fixed Term Contracts and Wage Theft

New Rules for Fixed Term Contracts

Effective from 6 December 2023, there are significant changes to regulations regarding fixed term contracts. These contracts are defined as employment agreements for a set period. Key changes involve:

• Limits on the duration of fixed-term contracts.
• Guidelines on extending these contracts.
• Rules regarding offering new contracts similar to previous ones.

For detailed information and any exceptions, visit Fair Work’s announcement on new rules for fixed term contracts.

What is Underpayment of Wages?

Starting 1 July 2021 in Victoria, specific practices have been criminalized, including:

• Intentionally underpaying workers.
• Dishonestly withholding wages, superannuation, or other entitlements.
• Falsifying records of employee entitlements for financial gain.
• Avoiding record-keeping of employee entitlements for financial benefit.

These laws target employers who deliberately and dishonestly withhold worker entitlements. However, unintentional errors made by employers diligently paying wages and entitlements are not considered wage theft.

What is Defined as an Entitlement?

Employee wage entitlements cover:

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

Employers are obligated to offer at least the minimum pay and conditions specified in relevant awards, agreements, contracts, or legislation. Note that minimum pay rates and conditions in awards and agreements cannot be superseded by any less beneficial employee contract or agreement.

What Does Wage Theft Look Like?

Wage theft includes practices such as:

• Not providing or compensating for meal breaks.
• Failing to pay overtime or penalty rates.
• Withholding specific allowances.
• Altering timesheets to underreport hours worked.
• Instructing staff to not accurately record all worked hours.

Given the complexity of payroll regulations, employers are advised to audit their payroll systems to ensure compliance. More information can be found at Victoria’s Wage Theft Laws.

Underpayment of Wages

Underpayment occurs when employers fail to pay the full entitled wage as per the applicable award, agreement, contract, or legislation. Awards specify the minimum employee entitlements regarding pay rates, allowances, overtime, leave entitlements, and loadings.

Employers must be aware that practices historically in place may no longer be compliant with current legislation. For instance, paying an employee a higher rate for all hours worked could contravene current laws.