Wage theft laws: Employers who deliberately underpay staff face jail and being fined $1.65m under new laws

Employers who deliberately underpay their staff could go to jail for 10 years and be fined $1.65 million under new “wage theft” laws that enter force today.

It’s one of a raft of newly enforced reforms the Government is keen to highlight as it begins a Federal election year with gloomy poll numbers in key battleground states.

Murray Watt, Minister for Employment and Workplace Relations, told ABC Radio National Breakfast the law came down to a “really simple principle.”

“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,” he said.

Mr Watt said the new measures were part of an ongoing Government effort to “get wages moving again” from ten years of wage suppression under previous Coalition governments.

“That’s why we’ve made a range of changes that are now seeing real wages grow in Australia for the first time in years,” he said. “We’ve had four consecutive quarters, or 12 months in a row of wages rising above inflation.”

The new laws follow a series of underpayment scandals and aim to close loopholes that have allowed some bosses to exploit their staff, with migrant workers especially vulnerable to abuse.

However, employment chiefs and business lobby groups have slammed the legislation for putting an unnecessary burden on business owners who already treat their staff fairly.

“We feel these laws are an overreach,” the Australian Chamber of Commerce and Industry’s chief of policy and advocacy, David Alexander, said in a statement to the ABC.

He argued the Fair Work Act, which defines responsibilities for employers, had now morphed in size to 500 pages, and cast doubt on the feasibility of the criminal prosecution process.

“We will be interested to see how many prosecutions will be made under these changes as employers want to do the right thing but are hampered with complex regulations,” he said.

The Coalition also opposed the reform, with Michaelia Cash, opposition employment and workplace relations spokesperson, arguing that “most underpayments are the result of businesses dealing with the overly complex and confusing Fair Work Act.”

Mr Watt dismissed the business community’s concerns, saying that most employers “do the right thing” when it comes to legal rates of pay and conditions and the laws were targeting “rogue” bosses.

“What we’ve also done in designing these laws is make very clear that honest mistakes won’t be subject to criminal prosecutions,” he said.

The Australian Council of Trade Unions (ACTU) on Wednesday welcomed laws to assist “more than one million Australian workers” experiencing wage theft by being paid below the national minimum wage or the lowest junior or casual rates in the awards system.

“The tough laws that come into force today will make a huge contribution to ending wage theft as a business model,” said ACTU Acting Secretary, Joseph Mitchell.

“Workers deserve every dollar of their pay and super should get the money that is owed them,” he said. “Businesses are on notice and need to pay their workers properly, especially vulnerable younger workers.”