Intentional Wage Theft Facing up to 10-year Imprisonment in Australia

CANBERRA:
Australia’s new laws that took effect on Wednesday made intentional wage theft a criminal offence that would see dishonest heads of businesses being imprisoned for up to 10 years and facing hefty fines.

Some large companies in Australia have been involved in cases of underpayment scandals, such as Woolworths, Qantas, and 7-Eleven. However, the company directors currently can only be investigated according to civil laws, without the threat of imprisonment, according to the Australian Broadcasting Corporation (ABC).

Under the Fair Work Legislation Amendment (Closing Loopholes) Act 2023, the government agency Fair Work Ombudsman can use the new tool to go after dishonest employers, with up to 10 years of jail terms and a fine up to nearly 7.83 million Australian dollars (4.87 million US dollars) for companies.

The new offence will apply to employers who intentionally engage in conduct that results in the underpayment of their employees. However, honest mistakes or miscalculations will not be caught by the wage theft offence, according to the Act.

Therefore, the employers’ intention has to be proved in wage theft cases to exclude honest mistakes, which might be difficult in practice as “Fair Work has never had to prove intent under its existing civil powers,” the ABC cited employment lawyer Daniel Victory as saying, Xinhua news agency reported.

The new laws will add more complexity to business, especially small business, criticised David Alexander, Australian Chamber of Commerce and Industry’s chief of policy and advocacy.

Meanwhile, the Department of Employment and Workplace Relations said last month that the newly registered Voluntary Small Business Wage Compliance Code provides employers with a clear pathway to avoid criminal prosecution for the new wage theft offence.

The Fair Work Ombudsman has also prepared guidance material on the steps employers can take to ensure they are paying staff correctly, the department said.