With the passing of the Wage Theft Act 2020 on 16 June 2020, the Victorian Government is criminalising intentional underpayments by employers.
The Act also establishes the Wage Inspectorate Victoria to investigate and prosecute offending employers.
The Act comes into operation on 1 July 2021, unless proclaimed earlier, and is novel amongst the Australian States and Territories in establishing such offences.
In Summary the Act Criminalises:
- Dishonestly withholding all or part of an employee’s entitlements, such as superannuation or gratuities; and
- Falsifying or failing to maintain employment records to procure a dishonest financial advantage, such as to mask wage theft. Such conduct may include altering rates of pay or hours worked by employees, or by not keeping records of hours worked at all.
Such conduct will be deemed dishonest regardless of an employee’s prior consent in circumstances where the withholding means that the employee accepts less than the minimum amount or benefit required under relevant laws.
If found guilty, employers may face penalties of up to 10 years imprisonment and fines of up to $991,320 for companies and $198,264 for individuals.
Extending liability to officers, bodies corporate, partners and partnerships, and unincorporated associations, the Victorian Government intends that dishonest employers will be held accountable under this new legislation.
Whilst honest mistakes are not the subject of the Act, it is vital that employers use the time available to address any risks relating to underpayments now to avoid scrutiny from the existing jurisdiction of the Fair Work Ombudsman and from the to be formed Wages Inspectorate Victoria.
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