Could underpayment of wages be ‘stealing’?
Underpayment of wages by employers is generally unintentional.
The introduction of the Criminal Code and Other Legislation (Wage Theft) Amendment Bill 2020 (the Bill) proposes the criminalisation of ‘wage theft’ by employers in Queensland. The Bill seeks to amend the Criminal Code Act 1899 and the Industrial Relations Act 2016.
It’s an offence of ‘stealing’
When the Bill is passed and the amendments to the Acts become law, it will be an ‘offence of stealing’ if an employer fails to pay their employees’ wages and/or entitlements, required by the relevant industrial instruments (Modern Award, Enterprise Agreement etc).
Errors and omissions resulting in under payment of employees’ wages and/or entitlements by employers, come as no surprise. Our industrial instruments and employment obligations are complex and constantly changing.
Mistakes made in the calculation of wages and entitlements are often due to an employer’s payroll and employment/HR administrative practice. This is evident by the Fair Work Ombudsman’s media releases in August 2020, relating to the Horticulture Sector and Sunwater Queensland.
Horticulture Sector
38 businesses (out of 83 businesses employing staff in Wide Bay and Moreton Bay) were found non-compliant.
Sunwater Queensland
Sunwater Queensland has back paid 73 employees more than $2.3 million and is also required to pay former employees. Sunwater underpaid some employees on individual contracts and also failed to meet its record keeping obligations. Employees were underpaid: base salary, annual leave loading, allowances, superannuation and accrued time off in lieu.
It is comforting to note, that the intent of the proposed amendments to the Criminal Code Act 1899, is not to capture employers who have made a genuine mistake and act honestly.
Be mindful
Employers must be mindful of the introduction of ‘an offence of an employer stealing from their employees’ is intended to cover a range of payments and entitlements required by a relevant industrial instrument (Modern Award, Enterprise Agreement etc):
- unpaid or underpayment of hours worked
- unpaid penalty rates
- unreasonable deductions
- authorised deductions that have not been applied as agreed between an employer and employee
- unpaid superannuation
- withholding entitlements (allowances and leave loading)
- underpayment through intentionally misclassifying an employee (Award and job classification)
- sham contracting (contractor owed employee entitlements) and the misuse of Australian Business Numbers (ABNs).
With the under payment of wages and entitlements, as well as sham contracting, soon to be criminalised (with penalties of imprisonment 10-14 years) in Queensland, now is the time for employers to actively prepare.
Prepare now
If you are concerned that there may be errors and omissions in:
- your payroll and/or your employment/HR administrative practice
- your engagement and payment of any independent contractors
an audit of your payroll and employment/HR administrative practice will identify any errors, omissions or gaps in your systems, procedures and processes.
Importantly, a thorough audit will provide:
- accurate information of the extent of any errors that may have caused underpayment of wages of employees and payment to any independent contractors;
- how to rectify any errors and omissions; and
- recommendations on implementing procedures and processes to meet your employer legislative obligations and compliance.
Ulton is your business partner.
Our Audit and HR Consulting teams can advise and support you with meeting your legislative obligations and compliance by conducting an audit of your payroll and employment/HR administrative practice. Contact our Human Resources Consultant, Christine Guy direct today.
References
Fair Work Ombudsman website – Sunwater signs Enforceable Undertaking, 28 August 2020, https://www.fairwork.gov.au/about-us/news-and-media-releases/2020-media-releases/august-2020/20200828-sunwater-eu-media-release
Fair Work Ombudsman website – Horticulture Sector Update, 27 August 2020, https://www.fairwork.gov.au/about-us/news-and-media-releases/2020-media-releases/august-2020/20200827-horticulture-sector-update
Colin Biggers & Paisley – Wage theft criminalised in Queensland – 20 July 2020
Criminal Code and other Legislation (Wage Theft) Amendment Bill 2020 – Explanatory Notes
%20(1).svg "Frame (18) (1)")
.svg "Close (1)")
2 min read
6 min read
