Following a flood of high profile ‘wage theft’ cases, including George Colambaris’s Made Establishment, Woolworths, 7Eleven and Qantas, Queensland has followed in the footsteps of the ACT and Victoria by criminalising wage theft.
The new laws focus on penalising employers who intentionally steal from their employees by failing to provide them with their full entitlements.
The new laws also set up a small claims process in the Industrial Magistrates Court for both state and federal jurisdiction employees to quickly recover underpayments of up to $20,000.
Criminal offence of ‘wage theft’
Part 1 of the Criminal Code and Other Legislation (Wage Theft) Amendment Act 2020 (Wage Theft Act) commenced on 14 September 2020 and amends the Criminal Code to include new section 391(6A), which provides that employee entitlements are a thing capable of being stolen. Employee entitlements that can be stolen include:
- unpaid hours or underpayment of hours
- unpaid penalty rates
- unreasonable deductions
- unpaid superannuation
- withholding entitlements
- underpayment through intentionally misclassifying a worker including wrong award, wrong classification or by ‘sham contracting’ and the misuse of Australian Business Numbers
- authorised deductions that have not been applied as agreed.
The Wage Theft Act also amends section 398 of the Criminal Code to include:
16 Stealing by employers
If the offender is or was an employer and the thing stolen is the property of a person who is or was the offender’s employee, the offender is liable to imprisonment for 10 years.
Additionally, where an employer commits fraud against an employee, the employer will be liable to imprisonment for up to 14 years.
The Queensland Police Service (QPS) have been given jurisdiction to investigate claims of wage theft. Importantly, the QPS would need to prove that the employer had intentionally stolen wages from an employee or had intentionally sought to deprive the employee of their entitlements. The legislation will not apply to employers who have accidentally underpaid staff and seek to rectify any underpayment when it is identified. At this stage it is unclear how the QPS will resource and conduct investigations into wage theft.
Wage recovery in the Industrial Magistrate Court
The Wage Theft Act also amends the Industrial Relations Act 2016 (Qld) (IR Act) to introduce a process for fair work claims and wage recovery claims in the Industrial Magistrates Court up to $20,000.
The registrar managing the case may refer the parties to conciliation before the Court will hear the claim. The QIRC Industrial Commissioners will be the conciliators for any conciliation conferences.
The Wage Theft Act also amends the IR Act to provide that an employer must (with the employee’s consent) share employee information to a registered employee organisation. An employer will be liable for up to 27 penalty units for failing to provide the employee information.
In a constantly evolving and complex industrial system, wage mistakes will occur. It is more important than ever for employers to ensure that they are correctly paying employees all their entitlements.
Employers should be conducting annual audits of each employee’s pay to ensure that they have been paid correctly and immediately rectify any shortfalls. Employers may wish to engage legal advice when conducting payroll audits as an additional layer of protection.
Employers should also ensure that employment agreements have appropriately drafted set-off clauses to protect employers from underpayment claims, particularly where an employee is paid an all-inclusive salary.