Under the Wage Theft Bill 2020, employers who dishonestly withhold wages, superannuation or other employee entitlements, will face fines of up to $198,264 for individuals, $991,320 for companies and up to 10 years’ jail. Offences will also capture employers who falsify employee entitlement records, such as payroll records, or who fail to keep employment records.

No longer will employers be able to avoid being held accountable through deliberate dishonest record-keeping practices, the Victorian Attorney-General’s Department said in a statement.

Work is “underway on reforms to make it faster, cheaper and easier” for employees to recover the money they are owed through the Magistrates’ Court, the A-G’s Department added. Furthermore, a Wage Inspectorate of Victoria office will be established with powers to investigate and prosecute wage theft offences.

Laws to ensure investigations and accountability

Victorian Attorney-General Jill Hennessy said the Andrews government had delivered on its promise to criminalise wage theft.

“Employers who steal money and entitlements from their workers deserve to face the full force of the law. Thank you to the countless employees who have come forward to bravely share their stories to help achieve this reform and hold employers to account,” she said.

Minister for Industrial Relations Tim Pallas added: “The establishment of the Wage Inspectorate of Victoria will ensure that employers who do the wrong thing are investigated and held to account.”

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How plaintiff firms have reacted

Responding to the passage of the new laws, Shine Lawyers head of employment law Sam Mangwana said that, despite wage theft having always been illegal, employers hadn’t stopped breaking the rules. “Clearly, more had to be done,” she noted.

“There have been far too many cases of major corporations with huge resources profiting by short-changing their workers. Victoria is now leading the country by escalating the severity of the sanctions available and enforcing proper [record keeping],” she said.

“We are called almost daily by workers who have not been paid their full entitlements such as annual leave, superannuation, and overtime. In these tough economic times, it’s more important than ever that Australian workers are paid in full for the work they do.”

Maurice Blackburn principal Josh Bornstein said that the Andrews government “should be commended” for the introduction and passage of the legislation.

“Wage theft is endemic in this country and victims are usually those who are most vulnerable. The fact many award workers are unable to ensure that they are paid even minimum wage speaks to their lack of bargaining power,” he espoused.

“If inequality is to be moderated and the economy strengthened, an effective collective bargaining system that enhances employee bargaining power is needed. The Andrews [government’s] move to criminalise wage theft is an important reform which restores some lost power to workers.”

Slater and Gordon principal Carita Kazakoff similarly congratulated the state government on the passage of the “landmark” laws and commended the union movement for “shining a light on these issues and campaigning long and hard for law reform.”

“We regularly encounter people who have had their wages, superannuation and leave entitlements withheld. It is clear that wage theft is endemic and has flourished under a system which lacks serious consequences for offenders,” she said.

“We expect the new criminal wage theft laws will serve as a significant deterrent against exploitation as a business model and will complement the existing civil regime.”