Wage Theft

Wage theft refers to the practice of paying workers less than they are entitled to legally. It includes employers underpaying wages, penalty rates, superannuation, overtime or commissions, and refusing entitlements such as sick or annual leave. 

Unfortunately, in some industries wage theft is common. It’s terrible for workers, but also bad for the government because lower wages mean lower income and payroll tax paid to fund essential public services, like health and education.

It was revealed in mid-2019 that famous chef, George Calombaris, had underpaid his staff by $7.8 million. Employees in the hospitality industry are frequently victims of wage theft due to many workers in this industry being either young, or foreign workers on visas, who are afraid to speak up.

Wage theft has also occurred in franchises such as Pizza Hut, 7-Eleven and Donut King and on farms, where transient workers are often exploited. To avoid being caught cheating employees of their wages, employers have been found to employ foreign workers on visas. These workers often don’t know their rights and are too afraid to speak up if they realise they are being underpaid.

Victoria is set to pass the first laws to make the deliberate underpayment of wages a crime. The Andrews government’s Wage Theft Bill will impose heavy fines and up to 10 years’ jail for employers who underpay their employees. The law is expected to be implemented mid 2021. It will be the first time in Australia that wage theft is considered a criminal act by law. It’s long overdue and hopefully other states and territories will follow suit, in the absence of strong federal laws against wage theft.

This story was originally published in Libby's June Newsletter. Please click here to subscribe to the email newsletter.