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The War on Wage Theft – An Update

Written by Christine Bulos

In this month’s newsletter, Legally Yours intern Christine Bulos provides a recap of Paul Cott’s ‘Lydiard Law’ Podcast episode The War on Wage Theft.

Wage theft is the dishonest underpayment or non-payment of employee entitlements, and includes not paying what is owed, or failing to record and accrue leave entitlements.

In May 2018, the Victorian Government vowed to further investigate the issue and to commit to introducing new laws to make wage theft a crime. The Wage Theft Act 2020 was introduced into Parliament on 18 March 2020 and commenced official operation on 1 July 2021.

Quite recently on 1 July 2021, new laws came into effect making it a criminal offence in Victoria for employers to dishonestly withhold employee entitlements or underpay employees.

The changes are ground-breaking, as these new laws expose employers to fines of up to $1,090,444 for companies, and up to $218,088 or up to 10 years’ jail for individuals.

Victoria is now the second state to introduce wage theft reforms, with Queensland recently introducing a similar regime, and NSW tabling a much-needed proposed scheme.

Under the Wage Theft Act 2020 (Vic), it is now a crime in Victoria to:

  • Dishonestly underpay employees;
  • Dishonestly withhold wages, superannuation, or other employee entitlements;
  • Falsify employee entitlement records to gain a financial advantage; and
  • Fail to keep employee entitlement records to gain a financial advantage.

The Victorian government has also now developed and implemented a governing entity being ‘Wage Inspectorate Victoria,’ which is an independent body that promotes and enforces –

  • Wage theft laws;
  • Child employment laws;
  • Long service leave entitlements;
  • Owner driver, forestry contractor, hirer, and freight broker obligations.

Wage Inspectorate Victoria holds the power and authority to conduct independent, impartial and transparent investigations to determine whether wage theft has indeed occurred to which then consequential action would be prompted. It is also useful to note that inspectors at the Wage Inspectorate Victoria have strong powers that they can use to investigate potential wage theft offences, including the power to:

  • Enter premises;
  • Obtain information and documents;
  • Seize evidence
  • Require a person to give evidence or answer questions under oath or affirmation;
  • Apply for and execute search warrants.

Many of these powers are coercive, meaning people must cooperate with requests made, unless they have a reasonable excuse for not doing so.

The introduction of these new wage theft laws acts as a massive step forward in the employment law space, essentially providing for much needed additional protections for employees against employers.

As mentioned by Paul, this often happens in the retail and hospitality industries where employees are often hired on a casual basis and already have limited protections. These new laws will act as a safeguard and warning against tyrant employers who may think that they can get away with intentional underpayment or withholding of wages.

If you want to be able to keep up to date with other recent changes in the law, be sure to subscribe to the Lydiard Law Podcast and you’ll never miss an episode!

Do you need legal advice?

If you have a specific question or you’d like to let us know what you need help with, head to our Talk to a Lawyer search resource and find the right lawyer for your needs, or contact Paul Cott directly via Paul’s Legally Yours Lawyer profile.

This Q&A Lawyer Feature post does not constitute legal advice or a legal opinion on any matter discussed and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area.

If you require any advice or information, please speak to a practising lawyer in your jurisdiction.

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