Victorian employers who deliberately underpay their workers could face prison under a re-elected Labor government.
This makes the state will become the first Australian jurisdiction to criminalise wage theft if Labor wins November’s election, Premier Daniel Andrews will say on Saturday, pledging up to 10 years behind bars for the most serious offenders.
Bosses will face fines of more than $150,000 as part of the promised reforms. Businesses found to deliberately withhold wages, superannuation or other entitlements, or found to falsify employment records or fail to keep the proper paperwork will face fines of $950,000.
Mr Andrews will tell hundreds of delegates to Victorian Labor’s annual conference at Moonee Valley on Saturday that legal process for ripped-off workers to recover wages will be fast-tracked, with lower court fees, cases heard within 30 days and a simpler process.
There will be a new agency, the Victorian Wage Inspectorate, which has already been funded with $22 million in the 2018 budget, to enforce the new regime.
The courts will have power to force employers convicted of wage theft to compensate their victims, with offenders then obliged to prove they have paid their debts to their employees.
“Every worker has the right to get a fair day’s pay for a fair day’s work,” the Premier said.
“The simple fact is underpaying workers is theft and it’s time it’s treated like that in our laws.”
Underpayment of workers is the responsibility of the Commonwealth, with the law enforced by the Fair Work Ombudsman, which takes offenders to the civil courts and can mount criminal prosecutions only in limited circumstances.
Wage underpayment has been revealed to be endemic with a series of scandals exposed in the media, involving some of Australia’s biggest businesses.
Trades Hall Council secretary Luke Hilakari said the move was “long overdue”.
Mr Hilakari said the proposal was an “Australian first” and a “collective win for everyone who cared about workers’ wages being stolen”.
He said federal workplace laws and the Fair Work Ombudsman had failed to deal with the problem.
Federal Labor has reservations about criminalising wage underpayment, saying in the “normal course of events” industrial relations should be in the civil courts.
There could also be concerns about the Victorian Wage Inspectorate duplicating the role of the Fair Work Ombudsman.
It comes as no surprise that business groups strongly oppose the push to make wage underpayment a crime.
Australian Industry Group chief executive Innes Willox said there was no need for new state laws because Federal laws already addressed the issue.
“The Fair Work Act already contains very large penalties for employers who underpay workers and those who do not keep the required pay records,” he said. “These penalties were recently increased by up to 20 times.
“Underpaying workers is not acceptable behaviour. However, ‘wage theft’ is an emotive term coined by the union movement designed to tarnish all employers. It describes something which is already effectively and comprehensively addressed in legislation.”