New Wage Theft Laws in Victoria


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Wage Theft Bill 2020 (Vic)

Please be advised that the Wage Theft Bill 2020 (Vic) (the Bill) passed Victorian Parliament on 16 June 2020 and received Royal Assent on 23 June 2020.

The Bill is due to commence on 1 July 2021 (unless it comes into operation before that date).

The Bill establishes new criminal offences to hold those employers who withhold employee entitlements dishonestly, accountable.

Theft of employee entitlements

Section 6 of the Bill prohibits dishonest withholding of employee entitlements by employers. An employer (being an individual, body corporate, partnership, unincorporated association or other entity that employs or has employed another person) is prohibited from dishonestly withholding an employee entitlement owed by the employer to the employee (either wholly or in part).  In short, an employee entitlement is defined as an amount payable by an employer to or in respect of an employee, or any other benefit payable or attributable by an employer to or in respect of an employee, including wages or salary, allowances and gratuities, and the attribution of annual leave, long service leave, meal breaks and superannuation.

In determining whether a withholding has been dishonest, section 6 provides that consent by or on behalf of the employee to the withholding is irrelevant if it reduces the employee entitlement to less than the minimum amount or benefit required under the relevant laws. For example, an employer’s conduct is still dishonest in circumstances were an employee has been induced to accept less than the minimum amount or benefit through lack of bargaining power or threats.

Section 6 of the Bill also prohibits an employer from dishonestly authorising or permitting (either expressly or impliedly) another person to withhold an employee entitlement owed by the employer to the employee (either wholly or in part). This can be shown by the employer or an officer of the employer giving that authorisation or permission (expressly or impliedly). Please note that this offence does not apply if the employer proves that it exercised due diligence to prevent the authorisation or permission being given.

It is also a defence under section 6 of the Bill if the employer proves that, before the alleged offence, the employer had exercised due diligence to pay or attribute the employee entitlements to the employee. Evidence that the employer failed to comply with a requirement of a regulator is evidence that the employer had not taken all reasonable steps to pay or attribute the employee entitlements to the employee.

It is important to note that section 6(7) of the Bill also prohibits an officer of an employer from dishonestly withholding an employee entitlement owed by the employer to the employee (either wholly or in part). Moreover, an officer is prohibited from dishonestly authorising or permitting (either expressly or impliedly) another person to withhold an employee entitlement owed by the employer to the employee (either wholly or in part). In short, an officer would include for example a director or secretary of a corporation, a member of the board of directors, a partner in a partnership and an office holder of an unincorporated association.

An officer who breaches section 6(7) incurs a penalty of level 5 imprisonment (10 years maximum). A body corporate who breaches section 6 incurs a penalty of 6000 penalty units (currently $ $991,320) and in the case of an individual 10 years imprisonment (level 5).

Falsification of employee records

The Bill introduces section 7 which provides that an employer must not falsify, or expressly or impliedly authorise or permit another person to falsify an employee entitlement record (being a record of an employee entitlement) in respect of an employee with a view to dishonestly obtaining a financial advantage for the employer or another person, or preventing the exposure of a financial advantage obtained by the employer or another person.

In determining whether the obtaining of a financial advantage is dishonest, consent by or on behalf of the employee to a reduction of the employee’s entitlement is irrelevant if the employee entitlement so reduced is less than the minimum amount or benefit required under the relevant laws. An example of falsification may be where the employer alters an employee’s payslip to provide a misleading rate of pay, with a view to dishonestly obtaining a financial advantage.

We note that section 7 also applies to an officer of an employer. An officer who breaches section 7 of the Bill incurs a penalty of 10 years imprisonment (level 5). A body corporate who breaches section 7 incurs a penalty of6000 penalty units (currently $991,320) and in any other case, a penalty of level 5 imprisonment 30 (10 years maximum) applies.

Failure to keep employee entitlement records

Under section 8 of the Bill an employer must not fail to keep, or expressly or impliedly authorise or permit another person to fail to keep, an employee entitlement record with a view to dishonestly obtaining a financial advantage for the employer or another person, or preventing the exposure of a financial advantage by the employer or another person. An example may be where an employer pays the employee for set shift hours and has recorded those hours but has not recorded the additional hours that the employee works as overtime, with a view to dishonestly obtaining a financial advantage.

In determining whether the obtaining of a financial advantage is dishonest, consent of the employee to a reduction of the employee’s entitlement is irrelevant if the employee entitlement so reduced is less than the minimum amount or benefit required under the relevant laws.

We note that section 8 also applies to an officer of an employer and breach of section 8 by an officer incurs a penalty of 10 years imprisonment (level 5). In the case of a body corporate a breach of section 8 attracts a penalty of 6000 penalty units (currently $991,320). In any other case, level 5 imprisonment (10 years maximum) applies.

Wage Inspectorate Victoria

Finally, we note that section 19 of the Bill establishes the Wage Inspectorate Victoria as a statutory body to investigate and enforce the new offences discussed above.

Please click here to access the full Bill.


Contact

For further information please contact the Law Compliance team:

Phone: 1300 862 667

Email: info@lawcompliance.com.au