Samantha Donovan: The first day of a new year sees fresh legislation come into effect. One of the most significant laws now in force makes deliberate wage theft a criminal offence nationwide. Employers found to have intentionally underpaid their staff could be hit with millions of dollars in fines and possible jail time. The federal government says dodgy bosses will be held to account, but a peak employer body fears small businesses will be disadvantaged by the legislation. Lexie Jeuniewic reports.
Lexie Jeuniewic: 2025 no doubt has many surprises in store, but some things are certain. One of them is that a federal election will be held, and the Albanese government is ringing in the new year reminding workers that today new laws come into effect, criminalising deliberate wage theft by employers.
Murray Watt: It’s always been the case that workers would face criminal charges if they stole from their employer, so we think that it’s only fair that employers who deliberately steal from their workers also face criminal charges as well.
Lexie Jeuniewic: Murray Watt is the Minister for Employment and Workplace Relations. He says under the reforms, which were approved by Parliament in 2023, companies found to be intentionally ripping off workers can now be fined over $8 million, while individual employers can face up to 10 years prison and more than a million dollars in fines. Previously, only civil laws could be used by the Fair Work Commission, the National Industrial Relations Tribunal, to prosecute dodgy bosses.
Murray Watt: There’s been a series of reports over the years that have shown that migrant workers in particular have suffered greatly from deliberate wage theft, so they would certainly be one of the groups that would benefit from this.
Lexie Jeuniewic: The crackdown on deliberate wage theft comes after a number of underpayment cases levelled at big employers, including the Commonwealth Bank and Woolworths, by the Fair Work Ombudsman. Joseph Mitchell is the Acting Secretary of the Australian Council of Trade Unions.
Joseph Mitchell: We think this will be an enormous deterrent for businesses using wage theft as a business model because now they can finally be held to account with extremely tough penalties.
Lexie Jeuniewic: Adrian Thoen is a member of the Finance Sector Union. He says he was among thousands of employees at the Commonwealth Bank who were underpaid between 2015 and 2021.
Adrian Thoen: I was actually part of the new enterprise bargaining agreement that they did back in 2023 to make sure that we did get a fair shake on that. And so we’ve all been put on the right contract now, the bank’s paid us back.
Lexie Jeuniewic: The Tasmanian, who still works for the Commonwealth Bank, hopes the new laws will protect other workers from wage theft in the future.
Adrian Thoen: I think like everyday Australians work really hard and when we work hard, we deserve to get paid what we’re worth. And these changes mean that big employers like Commonwealth Bank, McDonald’s, Woolworths, all of these sorts of places that have been pulled up for their systemic wage theft, they’re going to have to think twice before they start doing those sorts of things again because it’s going to mean that it’s less profitable to do so.
Lexie Jeuniewic: But the new laws have been slammed as too complex by both the opposition and Australia’s largest business association, the Australian Chamber of Commerce and Industry. The Chamber’s chief executive is Andrew McKellar.
Andrew McKellar: Well we think the laws miss the point. The big issue really is the added compliance burden that’s going to be there for small and medium sized business. The protections for small business are inadequate. And if you have more than 15 employees, then really you’re out there on your own. Many of those businesses, they don’t have payroll departments and HR departments and all of these supports to help them get it right.
Lexie Jeuniewic: Andrew McKellar believes the laws are just another regulatory hoop for small to medium businesses to jump through and the government should be focusing its attention on simplifying the system rather than adding another layer of complexity.
Andrew McKellar: The problem here is not so much that there are issues of deliberate theft or fraud. The big issue is the complexity of the award system. Too many pay scales, too many different pay points, allowances, penalties and so on that a small business has got to try and comply with. If they can’t do that, if they get it wrong, then the implications are very severe.
Lexie Jeuniewic: Murray Watt has assured honest mistakes by employers won’t face criminal prosecution.
Murray Watt: In fact, we’ve worked with small business groups to put together a code that small businesses can follow that takes them through the sorts of steps that they would need to undertake to ensure that they are never in a position of underpaying their workers. So we think this is a sensible and fair move.
Lexie Jeuniewic: In a statement, Fair Work says employers can self-report possible wage theft to enter into a cooperation agreement which would prevent the conduct from being criminally prosecuted.
Samantha Donovan: Lexie Jeuniewic reporting.