Call to delay wage underpayment legislation in Victoria

National employer association calls to delay wage underpayment legislation.

The national employer association Ai Group has called on the Victorian government to delay its wage underpayment legislation in light of the Federal Government’s industrial relations discussions and the ongoing impact of the pandemic.

Ai Group’s Victorian head, Tim Piper, said the legislation “sends the wrong message to employers and employees and undermines the need to maintain bipartisanship during the ongoing and finely balanced industrial relations negotiations.”

“One of the five working groups announced by the Federal Government will address the topic of compliance and enforcement, and wage underpayments are central to this topic. The working group will present an opportunity to search for consensus on this topic. It’s notable that some senior union leaders have expressed the view that criminal penalties for underpayments are not the answer,” Piper said.

“Most underpayments are inadvertent and there are heavy civil penalties in place to discourage the activity and these penalties have been increased substantially in recent times. It should not be a criminal offence.

“With the current economic situation it is up to employees and employers to work together to create a revitalised economy,” Piper said.

The Wage Theft Bill 2020 introduces financial penalties and potential jail time for employers who deliberately and dishonestly underpay their workers.

A Victorian government spokesperson told Inclean , the legislation will not take effect until mid-2021.

“We promised to criminalise wage theft and we will deliver on that promise,” the spokesperson said.

“Current laws require employers to pay a fair day’s wage but the existing legal regime has failed to prevent the exploitation of Victorian workers by unscrupulous employers.

“The Bill provides that the legislation will not take effect until mid-2021, giving employers 12 months to prepare themselves for the legislation.”

Lyndal Ryan, United Workers Union director of property services, told Inclean the union welcomes the new proposed laws that will apply to wages, allowances, superannuation and other entitlements such as leave.

“Every year thousands of the lowest paid workers in the country experience wage theft.

“Employers who steal from their staff need to be held accountable and our union welcomes the new proposed laws that will apply to wages, allowances, superannuation and other entitlements such as leave,” Ryan said.

“Strong and effective wage theft laws are important to restore the notion of a ‘fair day’s pay for a fair day’s work’.”

Under the proposed laws, employers who dishonestly withhold wages, superannuation or other employee entitlements, will face fines of up to $198,264 for individuals, $991,320 for companies and up to 10 years jail.

Offences will also capture employers who dishonestly falsify employee entitlement records, such as payroll records, or who dishonestly fail to keep employment records.

At the time of the announcement, the state government said it would also establish a Wage Inspectorate of Victoria as a statutory authority with powers to investigate and prosecute wage theft offences.

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