The key word is deliberate. We know that many companies are still going through the process of reviewing their payroll to ensure pay and entitlements have been fairly paid to employees. Honest mistakes made by employers who exercise due diligence in paying wages and entitlement are not considered wage theft.
It is now a crime for an employer in Victoria to:
- Deliberately underpay employees
- Dishonestly withhold wages, superannuation or other employee entitlements
- Falsify employee entitlement records to gain a financial advantage
- Avoid keeping employee entitlement records to gain a financial advantage
These crimes are punishable by a fine of up to $218,088 or up to 10 years’ jail for individuals and a fine of up to $1,090,440 for companies.
What are employee entitlements?
Entitlements are defined in the Wage Theft Act 2020 as an amount payable to an employee or any other benefit payable or attributable to an employee, including:
- Wages or salary
- Allowances and gratuities
- Annual leave
- Long service leave
- Meal breaks
Do you need to do anything differently?
There are no new record-keeping obligations on employers. It is only a crime to deliberately falsify these record or fail to keep them to gain a financial advantage or prevent the exposure of a financial advantage.
The wage theft laws only apply to alleged wage theft offences that occurred on or after 1 July 2021. However, it is still important to note that entitlements accrued before 1 July 2021 will be captured if it is suspected that an employer has dishonestly withheld those entitlements after 1 July 2021.
The payroll and wage theft landscape is changing
There is a lot of activity happening in the background to support employers accurately and fairly remunerate their employees. This includes as well as reviews of the Award systems to help simplify the payroll process.
Victoria is the second State to criminalise wage theft, with Queensland introducing legislation that came into effect in September 2020. We anticipate the remainder of the States and Territories to follow, with NSW currently debating its own wage theft laws.
We encourage all companies to regularly review their systems, salaries, Awards and entitlements to ensure your payroll is in line with the appropriate legislation and any errors are addressed quickly.