New wage theft laws for QLD – Jail time now possible

Wage Theft laws in Queensland

On 15 July 2020, the Queensland Labor Government introduced legislation to criminalise wage theft. QLD joins Victoria who already implemented wage theft laws, also in 2020.

Wage theft has been a big topic in the media this year and appears to be high on the Fair Work Ombudsman’s target list.

Following an inquiry into wage theft in Queensland and recommendations from the final report, the Palaszczuk Government has introduced the Criminal Code and Other Legislation (Wage Theft) Amendment Bill 2020 (Bill) targeting employers who commit serious and deliberate wage theft. Wage theft is widespread, affecting around 437,000 (approximately one in five) Queensland workers each year and costing more than $1 billion every year in unpaid or underpaid wages. In addition, the annual loss associated with the underpayment or non-payment of superannuation was estimated at $1.12 billion.

Criminal offence

The Bill will amend the Queensland Criminal Code definition of stealing to provide an offence against an employer who intentionally fails to make payment of wages or entitlements when it becomes payable to their employee. Wage theft offences will attract maximum penalties of up 10 years’ jail for employers and a fine of up to $991,320 for corporations.

The Bill will also increase the maximum penalty for the offence of fraud relating to wage theft. Employers who defraud their workers will face up to 14 years’ in prison.

Wage recovery claims to be heard by Industrial Magistrates Court

The new legislation will also create a simple, quick and low-cost wage recovery process for Queenslanders who suffer underpayment of their wages. Civil claims for unpaid wages up to $20,000 will be pursued in the Industrial Magistrates Court.

The Bill also provides a wage recovery process for claims brought by State system employees under the IR Act, including the recovery of unpaid wages and superannuation. Again, the intention is to facilitate a low-cost resolution between the parties, with conciliation being the first step, unless a party elects otherwise.

The legislation is not intended to capture employers who act honestly, its purpose is to capture employers who intentionally fail to pay employees and demonstrate an intent to deprive staff. The new system is much simpler and less costly for workers trying to recover entitlements. Previously many workers gave up because the process was too complex and time-consuming.

What is Wage Theft?

Wage theft takes many forms including:

  • the underpayment of wages;
  • unpaid superannuation;
  • unpaid penalty rates;
  • unauthorised deductions from pays;
  • the misuse of ABNs; and
  • sham contracting.

What can employers do to prepare?

Due to the complexity of modern industrial obligations, it is perhaps not surprising that payroll errors are made. In our experience, most underpayments are a result of administrative error or a shortcoming in the payroll system, rather than any deliberate attempt to underpay employees.

If you are concerned that there might be errors in your payroll system (including a lack of expertise), it is important to consider how you might best prepare for an audit of your system. A well-prepared audit provides employers with accurate information to establish the extent of any errors, and how to rectify them.

The information above is general, and therefore Industryus recommends that employers seek advice from an employment relations expert about your specific situation prior to taking any action.

Industryus HR offers a wage audit service, for employers who wish to have their payrolls checked to ensure compliance. The process is simple and requires very little interruption to your day to day operations.

Our advice membership also enables employers to contact an experienced HR consultant to discuss wage matters, whenever they may crop up, and in particular before they become an issue. Give our Gold Coast head office a call on 07 5655 4047 for more information on a tailored membership for your organisation.

Anika Wazlawek Industryus HR

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