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Everything you need to know about wage theft.

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Want to hear something crazy?

In exchange for your labour, your boss has to pay you all the wages and entitlements you earned. Not just whatever they feel like. So that’s:

  • The minimum legal hourly rate ($20.33 per hour or $772.60 per week on 1 July 2021 - but depending on your role it could be higher)

  • For every hour you worked (including opening/closing, and “trial shifts” are not a thing)

  • Any paid leave you accrue

  • Applicable penalty rates - that’s extra pay for working weekends, unsociable shifts or public holidays

  • 10% superannuation

Anything less is wage theft.

Wage theft, in other words, is when your boss decides that they’d rather pocket your earnings than give it to you.

But until right now (1 July 2021), there was really nothing preventing bosses from trying it on. Even if you caught them stealing your wages, and even if you went to all the hassle of proving it, all they would have to do was pay you back.

Now, I’m not an international jewel thief. But if I knew that the penalty for stealing was “give it back”… well, let’s just say I think I’d look great in a tiara.

Young workers, union members and activists have campaigned hard for years to stop dodgy bosses stealing wages. Bosses found guilty of the crime of wage theft can now face hefty fines and jail time. 

How big a problem is wage theft?

In the past three years nearly 1000 young workers have come to the Young Workers Centre saying they’ve had their wages stolen. Their bosses thought they could get away with stealing wages, superannuation and other entitlements because they thought they wouldn’t face significant fines or penalties. 

Audits have found that 84% of fast-food restaurants and 46% of restaurants and cafes aren’t paying workers all the wages they are owed.

The problem, in other words, is endemic. Honest business owners are being put at a competitive disadvantage by the shonks.

What do the new wage theft laws mean?

The Wage Theft Act has two goals:

  • It creates three new wage theft criminal offences; and

  • It establishes the Wage Inspectorate Victoria, a regulatory body to investigate and enforce these offences.

The Wage Theft Act 2020 amends the Crimes Act 1958 by introducing 3 new crimes into Victoria.

  1. Dishonest whitholding of employee entitlements
    This means it is a crime for your boss to deliberately fail to pay you your full pay, super, allowances or refuse to give you meal breaks, tips, leave entitlements

  2. Falsification of employee entitlement record
    This means it is a crime for your boss to falsify your employee entitlement records to obtain financial advantage or cover up wage theft. This could mean payslips showing you were paid super when you weren’t, rosters (for example, showing you took a meal break when you didn’t), bank accounts showing a transfer of money which didn’t occur. Falsifying a record includes making a record, copying a record or altering a record so that it is misleading, false, deceptive, or providing information that causes a record to be misleading, false or deceptive.

  3. Failure to keep employee entitlement record
    If your boss does not make a record, or destroys, defaces or conceals a record to dishonestly make money or to hide that they’ve made money through wage theft, they could be guilty of failure to keep an employee entitlement record.

These offences have a few things in common:

  • Your boss must not authorise or permit another person (such as your supervisor) to commit these crimes.

  • Even if you “agree” to be paid less than the legal minimum or to have your records falsified or destroyed, your boss can still be prosecuted.

  • To be found guilty of one of these offences, your boss must have acted dishonestly with a view to obtaining financial advantage. This means if your boss acted honestly but mistakenly, they may not meet the criteria for a Wage Theft crime.

  • Due diligence is a defence. This means that if your boss can prove that before the alleged offence, they had exercised due diligence to pay the correct entitlement, they will not be found guilty.

Due diligence means your boss needs to do their homework - taking reasonable steps to pay the correct entitlements, such as hiring a lawyer to review contracts and make sure they’re legal,or hiring accountants to review the accounts to check everything is in order.

Penalties

Employers who dishonestly withhold employee entitlements such as pay, super and leave will face hefty fines and jail time.

Penalties for these three offences include:

  • Fines of up to $1,090,440 for companies;

  • Fines of up to $218,088 for individuals; and

  • Up to 10 years jail for individuals.

If a director of a company commits a wage theft offence, the company must be taken to have also committed the offence and may be prosecuted and found guilty. Proceedings can also be brought against public bodies as employers.  Fines will increase each year with inflation.

How do we prosecute wage theft?

The Wage Theft Act also establishes a new regulatory body, the Wage Inspectorate Victoria. This Inspectorate will be tasked with investigating crimes under the Wage Theft legislation and working with the Office of Public Prosecutions to bring court proceedings against bad bosses suspected of wage theft.

If inspectors believe wage theft has occurred at a workplace, inspectors will have the power to execute search warrants and enter workplaces to investigate and collect evidence.

The Inspectorate will also publish guidelines and monitor compliance with the Wage Theft Act. 

Unions will be bringing cases of theft before the Wage Inspectorate and we’ll be pushing for prosecutions.

What’s next?

While the passing of the Wage Theft Act marks a significant step forward for wage justice and workers’ rights in Victoria, the fight is not over. We must continue holding bad bosses to account. The best way to do this is to stick with your workmates and join your union. If you suspect your boss is guilty of wage theft, call your union or the Young Workers Centre.

What IS wage theft, and why did we fight to make it a crime?

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