Corporations that intentionally underpay employees may face fines of greater than $1 million underneath new wage theft legal guidelines coming into impact in Victoria right this moment.
- Powerful new penalties will apply for people and firms that intentionally underpay employees in Victoria
- The regulation comes after a string of high-profile underpayment circumstances involving 7-Eleven, Woolworths, Bunnings and the ABC
- The Wage Inspectorate Victoria will examine wage theft and prosecute offenders
People who intentionally underpay workers or dishonestly withhold wages may resist 10 years’ jail, or fines over $200,000. For firms, the attainable high quality could be as excessive as $1,090,000.
Waitress-turned-campaigner Harriet Leadbetter was underpaid greater than $13,000 while working at a Melbourne cafe in 2015 and 2016.
Ms Leadbetter’s unpaid wages had been swiftly paid again when she alerted her employer to the discrepancy by way of a letter of demand she drafted with a union.
The brand new legal guidelines solely make it an offence if the underpayment is deliberate, which Ms Leadbetter’s former employer maintains was not the case.
However, Ms Leadbetter hopes the change will encourage employers to be extra cautious with payroll.
“It is their accountability to verify they pay their workers correctly, these legal guidelines make that actually clear.”
Through the years she was underpaid, Ms Leadbetter was generally down round $400 per week.
“That is some huge cash for anyone, not to mention a teenager who’s making an attempt to make lease in a metropolis that she’s simply moved to,” she mentioned.
“It was fairly aggravating.”
Wage theft not ‘enterprise as common’
The legal guidelines come off the again of a bunch of high-profile underpayment sagas.
In 2019, MAdE Institution Group, the hospitality empire movie star chef George Colambaris was part of, backpaid $7.8 million in wages and superannuation after admitting to underpaying more than 500 current and former employees.
Woolworths, the ABC, Bunnings and The Purple Cross have additionally confronted underpayment points in recent times.
After efficiently recouping her unpaid wages, Ms Leadbetter grew to become a political campaigner engaged on wage theft regulation reform.
She mentioned the spate of high-profile circumstances had modified the way in which individuals thought of underpayment.
“Underpayment was seen as one thing that was enterprise as common, a part of how you probably did enterprise,” she mentioned.
“These sorts of circumstances helped reveal to the general public this is a matter that is endemic throughout so many industries.”
Victorian legal guidelines ‘stronger’ than federal ones
Earlier this 12 months the federal authorities abandoned the bulk of a controversial industrial relations bill that included plans to criminalise wage theft.
A federal physique, the Truthful Work Ombudsman, can nonetheless pursue civil penalties for alleged underpayment, however a brand new Victorian physique, Wage Inspectorate Victoria, has the facility to suggest legal penalties.
Inaugural commissioner Robert Hortle mentioned companies doing the proper factor shouldn’t fear in regards to the new laws.
“Employers who act with honesty and make inadvertent errors needn’t concern these legal guidelines, it is about deliberate and dishonest withholding of worker entitlements,” he mentioned.
However he warned the inspectorate held vital powers to research cases of alleged wage theft, ought to or not it’s deemed needed.
“We now have the facility to request paperwork, compel attendance at interviews and search and seizure powers,” he mentioned.
Victorian Treasurer Tim Pallas mentioned Victoria’s new legal guidelines had “actual tooth and better enforceability” in comparison with the proposed federal adjustments.
“I do not imagine that the protections that the Commonwealth had been putting in had been sufficient,” he mentioned.
Mr Pallas warned companies that had been nonetheless paying cash-in-hand or intentionally underpaying employees to take heed of the brand new legal guidelines.
“In the event that they’re paying individuals in a approach that undermines award entitlements then they’re going to be breaching the wage theft legal guidelines,” he mentioned.
“Each enterprise must recognise they’re on discover right this moment.”
Companies say industrial relations ought to stay with the Commonwealth
Victorian Chamber of Commerce CEO Paul Guerra says the introduction of the brand new laws will complicate the state of affairs for enterprise house owners in Victoria.
“We will not have a state of affairs the place the state authorities cherry picks what it needs to get entangled in industrial relations as a result of all that does, it makes it extra advanced for companies to function on this state.”
“There’s a system in place, which has been catching firms which were doing it.”
“It is a federal system. And that is the system that the state authorities signed as much as again within the 90s and that is the place it ought to keep.”