State Wage Theft law is not new in Australia, as the Queensland Labor Government follows in the steps of both Victoria and Western Australia in passing Wage Theft Laws in the form of amendments to the relevant Criminal Code, providing for a 10 year sentence for “deliberate” wage theft and 14 years if it is found to be in conjunction with fraud.

In introducing this law the Government promises that the framework will provide for a “simple, quick and low cost” underpayment recovery process for employees to correct a wage theft.

The Queensland Criminal Code makes it an offence where staff steal from a business, but not the other way around. The new amendments have also changed the definition of stealing to “ensure the offence and the corresponding penalty applies to employers in relation to wages and entitlements”.

In recent times there have been several large Australian companies found in breach of the Fair Work Act for underpayment of wages to employees seeing Woolworths and Dominoes to name two that have been fined and ordered to pay employees unpaid wages.

 Why this law when the Fair Work Act already provides for underpayment offences?

A 2018 Government inquiry into wage theft in Queensland, A fair day’s pay for a fair day’s work? found that over 437,000 Queensland workers are affected by wage theft, amounting to approximately $1.22 billion in annual lost wages. The report also made several recommendations to address wage theft, influencing the introduction of the new laws. The timing pre the State election is not a surprise.

Key recommendations in the report were to “legislate to make theft a criminal offence where the conduct is…deliberate or reckless” and to ensure a “simple, quick and low-cost” process for workers to recover their wages.

The Explanatory Memorandum provides that the offence is intended to cover a range of payments and entitlements, such as:

  • unpaid or underpayment of hours worked;
  • unpaid penalty rates;
  • unreasonable deductions (for example, tip raiding in the hospitality industry);
  • unpaid superannuation;
  • underpayment resulting from misclassifications under an award;
  • entitlements owing as a result of sham contracting; and
  • misuse of Australian Business Numbers.

 What employers need to know

There are three key issues for employers to be aware of:

  • Prosecution of wage theft: Wage theft “can be prosecuted as an offence of stealing” through the amended definitions of stealing, which includes “a failure to pay an employee…an amount payable…in relation to the performance of work…when the amount becomes payable…under an Act, industrial instrument or agreement”. The Explanatory Memorandum suggests a broad definition of amounts payable to include penalty rates and superannuation.
  • Jail terms for wage theft: Employers found guilty of wage theft can be subjected to up to 10 years’ imprisonment, or, where the wage theft occurs by fraud, up to 14 years’ imprisonment.
  •  Easier process to recover wages: Queensland workers can now pursue wages claims (up to $20,000) through the Queensland Industrial Magistrates Court. Claims will be referred to conciliation “as soon as practicable after the proceeding for the claim is started…preferably…before a party to the claim files a defence”, to enable parties to “reach agreement on as many matters as possible”.

 What can employers do?

Employers should consider:

  • Assessing compliance of wage and salary payments with awards, employment contracts and industrial instruments to ensure that employee entitlements are correctly understood and applied.
  • Reviewing salary and pay processes and procedures: Once an assessment of compliance has been undertaken, employers should consider reviewing their payroll systems and processes to ensure checks and balances for the correct payment of employee entitlements.
  • Training your HR, payroll and accounting teams: It is prudent to consider training to address and respond to queries relating to underpayment of employee entitlements before these issues result in litigation.

Employer groups see the new laws stripping the rights of businesses to have legal representation in court proceedings as they will have to seek leave from the court to have a lawyer appear which may place businesses to be out of step with federal law.

The law will allow employees to authorise a union to access their employment records, regardless of that employee being a member of the relevant union. Under federal law, access by unions to the employment records of non-members requires authorisation from the Fair Work Commission.

At HR and HSEQ we can help you with all three of the above Employer actions and you can take advantage of our free no-obligation introduction review by call Chris on 0437334513. We look forward to assisting you when you call.