Victoria New Law to Target Wage Theft

In June, Victoria passed the Wage Theft Bill 2020 making it the first state or territory to make the underpayment of wages and entitlements a criminal offence. The effective start date is currently proposed to be July 2021.

The law has a broad application, applying not just to the underpayment of wages, but also to underpaying or withholding superannuation or entitlements, falsifying records or failing to keep correct records in order to dishonestly obtain financial advantage. It also applies to intentionally misrepresenting an employment relationship as a contractor in order to avoid paying correct entitlements.

The new law is aimed at deliberate or reckless conduct on the part of directors or officers of an employing entity and is not aimed at penalising inadvertent or innocent mistakes. Unintentional errors may still be penalised under the Fair Work Act existing laws; however, they will not be treated as criminal offences if there were no dishonest intentions. 

The legislation allows for the establishment of the Wage Inspectorate of Victoria as the statutory authority that will investigate and prosecute wage theft offences.

If an underpayment of wages or entitlements is deemed to be a wage theft offence, the penalties are severe: fines of up to $198,264 for individuals and up to $991,320 for companies. The possibility of up to ten years’ imprisonment also exists under the law.

The bill applies to anyone employing workers in Victoria, even if the employer is based in another state or overseas.

It is yet to be determined how the bill will interact with existing federal laws, particularly if a national law that criminalises underpayments comes into effect. 

For more detail see the Wage Theft Act 2020 legislation