4 February 2020

Wage theft

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Explanation of wage theft & outcomes of the wage theft inquiry in WA. Will it be criminalised?
Australia Employment and HR
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Wage theft has been a hot topic over the past 12 months due to a number of high-profile 'underpayment scandals' reported in the media.

High-end restaurant Rockpool, owned by celebrity chef Neil Perry, allegedly underpaid workers by $10 million and falsified finger-scanning payroll data. One previous employee of Rockpool alleges he was paid as little as $12 an hour. A second celebrity chef, George Calombaris, also attracted media attention for reportedly underpaying hospitality staff $7.8 million. Calombaris was fined $200,000 and lost numerous television and endorsement opportunities over the backlash from his underpayment scandal.

Large, publicly listed companies were not immune to wage theft issues either. In later October 2019, Woolworths revealed that 5,700 of its salaried employees had been underpaid by up to $300 million due to a failure to pay the workers their entitlements under the General Retail Industry Award 2010.

What is wage theft?

Wage theft is the systematic and deliberate denial of wages or benefits that are rightfully owed to an employee.

Public awareness of wage theft is increasing and has prompted government intervention, including through the release of discussion papers by the federal government and a wage theft inquiry in Western Australia.

Inquiry into Wage Theft in Western Australia

In January 2019 a State-wide inquiry into wage theft in Western Australia was announced. The inquiry received submissions from Unions, community legal centres, employer-represented organisations, government organisations and concerned community members. The final report was released on 6 December 2019.

What were the outcomes of the inquiry?

The report made a number of recommendations, including greater education, providing improved means of reporting wage theft, increasing the number of Industrial Inspectors and making amendments to the Industrial Relations Act 1979 (WA).

The most significant recommendation was that, in principle, criminal sanctions should be implemented for the most serious cases of systematic and intentional underpayment of wages.

Will wage theft be criminalised?

Many of the inquiry submissions supported the criminalisation of wage theft, which occurs in other jurisdictions such as the United States. The report made it clear that it did not support criminal penalties when underpayments were not deliberate.

On a federal level, the Federal Government has also stated that they will seek to criminalise wage theft.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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