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Highlights
- - Australia introduces strict penalties for wage theft from January.
- - Major companies implicated in past wage theft cases.
- - Employers can face imprisonment and substantial fines.
Australia has enacted new laws to criminalise wage theft, introducing severe penalties starting January 1. These regulations are set to address deliberate underpayment practices, with businesses and individuals facing significant consequences for non-compliance. Under the legislation, employers found guilty of wage theft could face up to ten years in prison or fines of up to AUD 1.65 million, while companies may be fined as much as AUD 8.25 million.
This move comes after years of public outcry over wage underpayment scandals involving major companies such as Woolworths (ASX:WOW), Qantas (ASX:QAN), NAB (ASX:NAB), and BHP (ASX:BHP). Other notable cases include the ABC and 7-Eleven. In 2024, Sushi Bay was fined AUD 15.3 million for underpaying 163 workers, many of whom were migrant visa holders.
Stricter Penalties for Wage Theft
The newly introduced federal laws shift wage theft enforcement from civil to criminal penalties, a significant development in Australian employment law. Unlike previous civil cases, these criminal charges carry harsher consequences, including imprisonment. The Fair Work Ombudsman is tasked with proving that employers intentionally avoided paying due wages, superannuation, or other entitlements.
The laws apply to offences committed from January 1 onward, requiring federal referrals for prosecution. Legal experts have pointed out the increased burden of proof in criminal cases, indicating a focus on severe or high-profile instances of wage theft.
Challenges for Businesses
While the regulations aim to deter wage theft, some business groups, including the Australian Chamber of Commerce and Industry, have raised concerns about the legislation's impact on smaller enterprises. They argue that the complex regulatory environment could overwhelm small businesses, which might struggle to comply.
Fair Work encourages employers to proactively address underpayments. Companies that self-report and cooperate with investigations may avoid criminal prosecution through agreements, promoting compliance and transparency.
Implications for Employers
This legislation marks a major step in safeguarding workers’ rights. With significant penalties for non-compliance, businesses are urged to review payroll systems and ensure full compliance with employment laws. Companies across all sectors are under increased scrutiny, reinforcing the importance of ethical and lawful practices in workforce management.
