Criminalising Wage Theft

Our legal team’s new Senior Associate and Senior Workforce Advisor, Monica Drivas, has timely insights into proposed new penalties for underpayment/non-payment of employee entitlements.

Criminalising Wage Theft

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The Criminal Code and Other Legislation (Wage Theft) Amendment Bill 2020 (Bill), if passed as introduced into Parliament on 15 July 2020, expands upon the avenues currently available to hold Council officers criminally liable for underpayment or non-payment of employee entitlements and increases penalties if found guilty. 

Key changes proposed by the Bill include: 

  1. amendment to the definition of ‘stealing’ under the Criminal Code Act 1899 (Qld) (Criminal Code) to include employees not being paid entitlements; and  

  1. increasing the maximum penalties in the Criminal Code for the offences of stealing and fraud relating to wage theft. 

Non-payment of wages considered stealing 

The Bill proposes to amend the definition of ‘stealing’ under the Criminal Code to now incorporate employers failing to pay employees (under either the Industrial Relations Act 2016 or the Fair Work Act 2009). The amendment would enable the prosecution of an employer for not paying an employee for work performed. 

Whilst the term ‘an amount payable to an employee in relation to the performance of work’ is not defined, the Explanatory Note accompanying the Bill clarifies that it is intended that the term will capture a broad range of payments and entitlements, including: 

  • 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; and 

  • authorised deductions that have not been applied as agreed. 

If an employer is prosecuted and found guilty of stealing from their employee(s), they may face imprisonment for up to 10 years. 

Increased penalty for fraud   

Currently any person who commits the crime of fraud by, for example, dishonestly causing a determinant to any person or gaining an advantage for any person, faces a maximum penalty of five years. If the Bill is passed however, s408C(2) of the Criminal Code will be amended to include employers among the list of offenders liable for up to 14 years imprisonment for the crime of fraud.  

Possible applicability to Council  

Unlike the Wage Theft Act 2020 which was recently passed in Victoria, a definition of the term ‘employer’ is not yet provided in either the Bill or the Criminal Code.  Accordingly, it is difficult at this stage to accurately assess which Council members and/or officers could potentially be found liable for the crime of fraud or stealing under the proposed changes.   

We are here to help. Peak Services Legal will keep you updated of developments as they progress. 

Article by Monica Drivas, Senior Associate & Senior Workforce Advisor. 

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For information on Peak Legal and Workforce Services contact us on peaklegal@wearepeak.com.au.