New Wage Theft Laws

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Published by Preston Law on 29/09/2020

In September 2020, the Queensland Government passed new laws which find employers who deliberately steal from their workers will now face jail time. This comes as the result of a parliamentary inquiry which investigated the prevalence and impact of wage theft on Queensland workers. The report “A fair day’s pay for a fair day’s work? Exposing the true cost of wage theft in Queensland” found that wage theft is endemic across Queensland, affecting 437,000 workers and costing them approximately $1.22 billion in wages and $1.12 billion in unpaid superannuation each year.

The report provided 17 recommendations to combat wage theft, including two which required legislative amendments.

What is wage theft?

Wage theft takes many forms including:

  • the underpayment of wages
  • unpaid penalty rates
  • unreasonable or unauthorised deductions
  • unpaid superannuation
  • withholding entitlements
  • underpayment through intentionally misclassifying a worker, including the wrong award, wrong classification, or by sham contracting and misuse of ABN’s

What are the penalties?

The Bill amends the Criminal Code and Industrial Relations Act 2016. Under the amendment, employers who commit wage theft now face up to 10 years imprisonment and up to 14 years for fraud.

For an employer to be successfully charged, they have to be shown to have intentionally withheld an employees entitlement. Therefore, employers are not considered to have stolen wages if there is an honest belief that they had paid the correct entitlement or if the underpayment was an unintentional mistake or delay.

The amendment now also provides a simple, quick and low-cost wage recovery process for workers. It includes a streamlined small claims process which sees the Queensland Industrial Relation Commissioners undertaking conciliation before the matter goes to a court hearing. 

Recommendations for Local Governments

Due to the complexity of Local Governments industrial obligations, it is not surprising payroll errors are made. Generally, most payroll errors are the result of an administrative error and are not a deliberate attempt to underpay employees.

Following this amendment, we recommend that Local Governments take the following steps:-

  1. Review their payroll records to ensure compliance with modern awards, certified agreements or other industrial instruments.
  2. Consider policies and procedures, including a 12 monthly review to ensure wages increase in accordance with industrial obligations. This may include conducting audits on payments which have been made to a sample of employees for a select period.
  3. If your review finds that you are not compliant, take action to rectify the situation. The Industrial Relations Act 2016 imposes a statutory time limit of six years in which wage recovery action may be taken.
  4. Seek legal advice or assistance if you are unsure of your obligations.

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