News & Views

6th July 2021

Wage Theft Laws Now Apply in Victoria

On 1 July 2021, the Wage Theft Act 2020 (Vic) came into effect. Under the legislation a new enforcement body, the Wage Inspectorate Victoria, will investigate allegations of wage theft and take enforcement action as appropriate, including large fines and imprisonment in extreme cases.

Offences Under the Wage Theft Act 2020

Three criminal offences are stipulated under the Wage Theft Act 2020:

  • Dishonest withholding of employee entitlements;
  • Falsifying employee entitlement records; and
  • Failure to keep employee entitlement records.

The primary offence targeted by this legislation relates to the “dishonest withholding of an employee’s entitlements.” Convictions for this offence require certain factors to be proven beyond reasonable doubt. These include the existence of an employment relationship, the withholding of an employee entitlement, and the act of withholding, being deliberate and dishonest.

Related offences include the falsifying of employee records and the failure to keep employee records, where these actions are undertaken with a view to avoid wage theft detection.

Advice to NECA Members

Whilst “honest mistakes” will not be prosecuted under these laws, it is unclear how such mistakes will be determined under the legislation, and this appears to be an area that remains open to interpretation.

Businesses who have obtained, and relied on, professional advice may be able to establish a defence if they are investigated and/or charged under the laws.

While these laws prescribe maximum penalties (of up to 10 years’ imprisonment for individuals and up to $1,000,000 in fines for companies) – and set penalties for certain offences, there is no scale of penalties outlined in the Act.

Given the lack of explicit detail on how these laws will be applied, NECA strongly urges all members to ensure their payroll practices and record keeping systems are updated, accurate, and that any incorrect payments to employees are remedied as soon as practicable, if and when they are identified.

More Information

The Wage Theft Act 2020 (Vic) is accessible here, and its accompanying explanatory memorandum here.

Members are encouraged to contact the Workplace Relations team at workplace.relations@neca.asn.au for assistance and advice.