How to avoid being a victim of wage theft

Wage theft is rampant in Australia, with australianunions.org.au stating roughly one-third of workers are victims, missing out on an estimated $1.35 billion annually.

They define wage theft as "deliberate underpayment" of entitled monies. It is vital for education staff to understand that this goes beyond just wages.

It can mean being paid less than you are entitled to under the relevant award or agreement, or less than the national minimum wage, but it also includes unpaid superannuation, leave, overtime, training periods and penalty rates.

It is often long service leave (LSL) that is underpaid in the education sector, but employers do steal from weekly wages, particularly at English Language and other private colleges.

The federal government abandoned proposed wage theft legislation earlier this year when its Industrial Relations Omnibus bill foundered.

However, new rules outlawing wage theft just came into effect in Victoria. And a new agency, Wage Inspectorate Victoria, will enforce them.

While you can lodge a complaint about wage theft or LSL breach by an employer directly (Wage Inspectorate website), we strongly urge you to contact the union first. We can pursue any issues directly and help you to maximise the prospects of your claim succeeding.

Victoria's new wage theft laws

On 1 July 2021, it became a crime for an employer in Victoria to:

·         deliberately and dishonestly underpay employees

·         deliberately and dishonestly withhold wages or other employee entitlements

·         falsify employee entitlement records to gain a financial advantage

·         avoid keeping employee entitlement records to gain a financial advantage.

These crimes are punishable by a fine of around $200,000 or up to 10 years’ jail for individuals and a fine of almost $1 million for companies. The maximum jail term of the jettisoned federal laws was four years.

There are three elements to underpayment being classified a crime. It must be:

·         deliberate

·         dishonest

·         an underpayment or withholding of entitlements.

Honest mistakes made by employers who exercise due diligence in paying wages and entitlements are not considered wage theft.

The new laws are overseen by the Wage Inspectorate Victoria, an independent body set up by the state government to promote and enforce the wage theft laws and long service leave entitlements.

Their inspectors are empowered to investigate potential wage theft offences. They have the right 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.

 If they believe a wage theft offence has been committed, inspectors may:

·         issue a formal written warning

·         accept an enforceable undertaking

·         bring criminal proceedings

·         refer indictable matters to the Office of Public Prosecutions for advice and criminal prosecution.

Inaugural Wage Inspectorate Victoria commissioner Robert Hortle has promised to exercise the criminal sanctions in the new laws.

"Employers who act with honesty and make inadvertent mistakes need not fear these laws, it’s about deliberate and dishonest withholding of employee entitlements," Hortle said.

"We have the power to request documents, compel attendance at interviews and search and seizure powers."

In support of the new laws, the Victorian government has allocated $9.6 million for a ‘fast track’ model for hearing wage theft cases in the Magistrates’ Court.

Grace Dowling, organiser with Hospo Voice, the union on the frontline of the wage theft fight, supported the laws but told australianunions.org.au "workers banding together and joining their union, making sure they have real fortification on the ground, is always going to be the strongest weapon against wage theft."