Industry news

Victorian employer faces wage theft prosecution

Victorian employer faces wage theft prosecution
Vijhai Utheyan
Vijhai Utheyan
minute read
December 1, 2022
Workforce compliance

Victoria’s wage theft act was introduced in 2020 by the Andrews government to tackle the widespread failure by employers to ensure adequate workforce compliance. The law makes it a crime to deliberately or dishonestly underpay your workers. It is also intended to extend beyond intentional actions and capture occurrences where an employer has been reckless in causing an underpayment. This means that employers who do not have adequate compliance procedures in place can be prosecuted, even if they did not intend to underpay their workers.

In a national first, Wage Inspectorate Victoria, the statutory body charged with investigating and enforcing compliance with the Wage Theft Act 2020 (VIC), has commenced prosecutions against a regional restaurant, Rehmat & Mehar Pty Ltd (trading as The Macedon Lounge) and its owner. The case involves 47 charges alleging that the company and the owner dishonestly underpaid four workers over $7,000 in wages, penalty rates, and superannuation. The owner personally faces a fine of up to $218,088, or up to 10 years jail time, and the company could be left with a fine of over $1 million. 

Victoria’s wage theft laws provide a due diligence defence to companies and officers who have inadvertently underpaid their workers. Due diligence under the act is a high bar that requires demonstrating a continuous approach to compliance. Employers will have to show that they took proactive steps to ensure workers were paid their entitlements as opposed to completing periodic retrospective reviews. In the case of The Macedon Lounge, if the company and the owner can establish that they have exercised due diligence in paying wages and entitlements, any underpayment will not be considered wage theft. In essence, they needed a solution in place that shows a continuous approach to workforce compliance.  

Yellow Canary can help ensure that you are taking a continuous approach to compliance through our Always On Compliance solution. Always On Compliance could help establish that your company and its officers undertook adequate due diligence with respect to paying employees their entitlements.  

Reach out if you would like to learn more about our Always On Compliance solution for your business at  

* Yellow Canary content on this website is intended solely for the purpose of offering commentary and general knowledge. The content is not intended to constitute legal advice. You should seek legal or other professional advice before acting or relying on any of the content.

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