Government moves to criminalise wage theft – $10m fines

The federal government is criminalise wage theft, introducing big penalties for employers who deliberately underpay workers.

Signalling the government’s move – foreshadowed before the election – the Minister for Employment and Workplace Relations Tony Burke said: “If a worker steals from the till, it’s a criminal offence – as it should be.

“But in many parts of the country if an employer steals from a worker’s pay packet, it’s not.

“It’s time to end this double standard once and for all.”

As part of the Closing Loopholes Bill to be introduced into Parliament today there will be a maximum possible penalty of 10 years imprisonment and maximum fines of up to $7.8 million – or three times the amount that was underpaid if that amount exceeds the maximum fine.

This is the first time the level of penalty can be proportionate to the extent of the underpayment.

Burke said: “Criminal penalties won’t apply to employers who make honest mistakes.

“Pathways will be available for employers who self-report and take reasonable steps to repay the correct amount.

“Support will be provided by the Fair Work Ombudsman in educating employers on their responsibilities.”

The Fair Work Ombudsman will be responsible for investigating new offences and would also have the discretion not to pursue criminal proceedings if the business enters into a co-operation agreement.

Enforceable Undertakings for civil breaches will continue to be available where appropriate.

“We are also strengthening the compliance and enforcement framework in the Fair Work Act by increasing the maximum penalties available for civil breaches of underpayment-related provisions – fulfilling recommendation five of the Migrant Workers’ Taskforce report that this government has committed to implementing.

“A strong and visible regulator that is equipped to detect and take action against criminal conduct will be crucial to delivering the benefits of a new offence in deterring underpayments.”

The Government will provide $32.4 million over four years to implement its commitment to criminalise wage theft.

The increases to civil penalties and changes to the “serious contraventions” provisions will commence 1 January 2024. The new wage theft offence will commence by proclamation or no later than 1 January 2025.

Picture: Tony Burke