There is mounting evidence that many workers have experienced serious and systemic underpayment of basic employment entitlements, notwithstanding the efforts of the Office of the Fair Work Ombudsman (FWO) over the past decade or more.
‘Wage theft’ has been uncovered in high-profile businesses, such as 7-Eleven, Domino’s Pizza, Woolworths and the well-known restaurant empire formerly owned and operated by the celebrity chef, George Calombaris. The economic recession resulting from entertaining the COVID-19 pandemic show is likely to further exacerbate these pre-existing problems.
The term ‘wage theft’ was first coined in the United States where willful breach of wage and hours regulation constitutes a criminal offence. Thereafter, ‘wage theft’ has been used to label a range of unscrupulous employer practices from sham contracting to unlawful deductions.
The range of practices captured by the term ‘wage theft’ is potentially quite varied however, the outcome for affected employees is somewhat similar — that is, ‘each deprives the victims of what is lawfully due to them as total remuneration for their time, labour and efforts.
With a forever growing list of Australian operating businesses caught for underpayment of wages, and with living costs in Australia consistently increasing and therefore compounding the reduced take home pay for Australian employees, it is no wonder the Federal government is about to introduced some tough penalties for Australian operating businesses caught short changing their employees.
From the 1st January 2025, and as part of changes to workplace laws, intentional underpayment of wages by employers will become a criminal offence.
Employers will commit an offence if:
Note; the new offence only applies to intentional underpayments that happen after these provisions take effect. This includes where they’re part of a course of conduct that started before the provisions take effect.
These provisions don’t apply to certain employees for:
These laws also don’t apply to employers who:
The following penalties will apply:
The following penalties will apply:
The Fair Work Ombudsman (FWO) will be responsible for investigating suspected underpayment offences.
Contact HR Chief now and arrange a Payroll audit to ensure your business is meeting or better, exceeding the minimum pay rates for your employee as determined by legislative instruments.
Depending on your employee numbers, number of operating jurisdictions, the current state of your industrial agreements and framework, a Payroll audit could be quick or it may take some time to fully understand your exact position of compliance or worse – non compliance.
Unfortunately, ignorance is no excuse when it comes to wage theft. Besides, you owe it to your employees. Not much point harping on about your great culture and how your employees are your greatest asset when your business silently short changes your employees.
You may have heard “Culture eats Strategy for Breakfast”, Well Underpaying your Employees or Worse; “Wage Theft” is Ready to Crash the Lunch Party and FRICKIN eat your Culture for Lunch.
I could go on but I think you have got the point.
Contact HR Chief now to arrange a Payroll audit to ensure your business is meeting or better, exceeding, minimum pay rates.
Paul Marshall
Partner | HR Chief | FCPHR
With decades of Business and HR experience a HR Pro, corporate trainer, author and a welcomed and trusted business partner with commercial awareness and expertise in people, performance and HR capabilities .
Author of:
103 Golden Tips to Turbo Charge your Employees Skyrocket Productivity and Get More Output
103 Golden Tips to Turbo Charge your Business make More Money and Get Rich
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