Wage theft is now a criminal offence in Australia. State specific wage theft laws in Queensland and Victoria mean that employers in those states can face criminal charges and convictions due to payroll underpayments.
The ‘Closing Loopholes’ Bill, tabled in the House of Representatives on 4 September 2023, proposed a significant reform in Australia’s industrial relations system.
The Closing Loopholes Bill seeks to eliminate the government’s perceived loopholes in employment laws, which they claim are being exploited by businesses.
Following consultations with various stakeholders, on 28 November 2023, the Federal Government proposed a series of amendments to the bill. The Closing Loopholes Bill since passed the House of Representatives on 29 November 2023. On December 7 2023, Labor reached a deal with the crossbench to split the Closing Loopholes Bill into two parts. Part 1 of The Closing Loopholes Bill has now passed the senate and includes wage theft provisions.
Intentional wage theft now carries severe penalties of up to 10 years in prison and fines reaching $1,565,000 for individuals and $7,825,000 for corporations, or three times the value of the underpayment – whichever is higher.
Part 2 of the act is yet to pass the senate and includes civil provisions. Serious contraventions are expected to cover recklessness as well as intentional acts, with the maximum fine increasing to $939,000, or three times the underpaid amount if it exceeds the cap. These reforms are prompting directors to think ahead about their compliance strategies, to avoid penalties resulting from honest mistakes or ignorance.