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Government moves to criminalise wage underpayment

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Government moves to criminalise wage underpayment

The government is set to criminalise wage underpayment in the wake of a number of high-profile payroll error cases, but experts have instead called for a review of the awards system.

Bookkeeper Jotham Lian 25 July 2019
— 1 minute read

During parliamentary question time on Wednesday, Prime Minister Scott Morrison put employers on notice by moving to criminalise wage theft.

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“Right now, the Attorney-General is drafting laws to deal with criminalising worker exploitation,” Mr Morrison said.

The focus on underpayments come after celebrity chef George Calombaris’ MAdE Establishment group of companies backpaid $7.8 million in underpayments after it found “incorrect processes and failures within its payroll and human resources functions”.

In 2017-18, the Fair Work Ombudsman audited 4,572 businesses, recovering more than $29.6 million in unpaid wages for more than 13,00 employees.

However, workplace relations specialist Employsure has instead called for the government to examine the complexity of the awards system that often leads to mistakes.

“Before we label an entire section of Australia’s economy as bosses intent on ripping off their staff, can we perhaps examine a deeper reason why employers might be struggling to pay their staff correctly?” said Employsure senior employment relations adviser Michael Wilkinson.

“While systematic underpayment is a serious matter, it’s honest errors and a lack of understanding of entitlements that puts smaller hospitality businesses at risk.

“Its no secret that we have one of the most complex workplace relations systems in the world, and hospitality employers are especially prone to making wage errors.

“Between casuals, part-time and full-time workers, along with rising minimum wages, various penalty rates and award entitlements, it’s a merry-go-round and they can find it hard to navigate.”

Mr Wilkinson said nearly a quarter of all calls to Employsure relate to basic employee entitlements, highlighting the struggle that employers face.

While investigation into the causes for non-compliance is needed rather than heaping more regulation, compliance and punishment onto employers, Mr Wilkinson said the recent attention is a “wake-up call” for employers to tighten their practices.

“Ignorance is not an excuse in the eyes of the FWO, which will pursue cases of underpayment in an attempt to reclaim any unpaid wages,” Mr Wilkinson said.

“The FWO will be targeting fast food, restaurants and cafes as part of its compliance and enforcement action over the coming 12 months. This is certainly a cautionary tale for all employers in the sector.”

Government moves to criminalise wage underpayment
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Jotham Lian

Jotham Lian

Jotham Lian is the news editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.

With a focus on breaking news and exclusive analysis, Jotham keeps Accountants Daily readers up to date with company moves, tax updates and essential business and client strategy. 

Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.

You can email Jotham at: This email address is being protected from spambots. You need JavaScript enabled to view it. 

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