Underpayments and Wage Theft in Australia

Underpayments and Wage Theft in Australia

This Article on ‘Underpayments and Wage Theft in Australia‘ is written by Suchit. A 3rd year student from NMIMS School of Law, and an intern at Legal Upanishad.


Wage theft in Australia has not been invented recently. However, recently, the awareness of unpaid wages has exploded. This happened because wage theft in Australia are more common than ever (as this move and ACTU member moves show), and wage thefts are reported more often. Wage theft takes place in a regulatory system that allows it to prosper. The fair labor ombudsman never has sufficient resources to take full responsibility for compliance with labor law, and the employer who committed the theft of wages knows this.

The trade union movement, which focuses solely on promoting the interests of workers, wants to identify and counter wage theft in Australia, if possible. But without greater rights and authority, this cannot be done effectively (Wage Theft: The Exploitation of Workers is Widespread and has become a Business Model). More on the specific ways trade unions need to enter the workplace and change their right to identify, investigate, and fight wage thefts in Australia is further under the heading is the best way to identify and detect wage and pension theft. Pension theft is adequately protected from unwanted treatment.

Underpayments and Wage Theft in Australia: Criminality

Over the last 18 months, some Australian states have taken steps to criminalize “Unpaid wages”. There are some cases that are drawing attention from major Australian organizations focuses on low-paying staff being investigated by FairWork Ombudsman. It is important for companies that employ Australian workers subject to modern award rules to actively monitor their legal obligations and manage their risks. Improper management can expose employers to criminal risk as well as significant financial or reputational risk.

This article provides insights on how businesses can mitigate the associated risks. Various Australian states are working to criminalize employee billing underpayments. All Employers who are currently dealing and doing business is in Australia should now know their legal obligations as this is a really nice time and opportunity to save themselves and their business from substantial losses.

Underpayments and Wage Theft in Australia
Underpayments and Wage Theft in Australia

Fines for violating fair labor laws are high, but low-wage scandals can pose a significant reputational risk to businesses. So far, three Australian states have implemented the following:

 -In late 2019, following an investigation into unpaid wages, Western Australia announced its intention to criminalize unpaid wages and strengthen the state’s industrial law (Dawana Wright, Mark Pulvirenti, , 2021).

 -In June 2020, Victoria became the first Australian state to pass a similar law that came into force on July 1, 2021. Under this new law , employers, directors, and officers may be liable for underpayment of wages and other allowances, and failure to keep proper records of employee claims.

 -In September 2020, the Queensland Criminal Code was amended to allow Queensland employers who deliberately underpaid workers to be sentenced to up to 10 years in prison. Other states have not yet announced their intention to introduce similar legislation, but this issue could remain on the agenda at both state and federal levels.

Victorian Wage Theft in Australia Law, 2020

On  July 1, 2021, the Unpaid Wages Act 2020 (Vic) (“Act”) will come into effect. The law prohibits employers from deliberately underpaying employees, dishonestly rejecting employee claims, or not keeping proper records of employee claims in order to gain financial benefit. That is a criminal offense. These crimes can be fined up to A $ 198,264 or 10 years in prison for individuals and up to A $ 991,320 for businesses. In March 2020, the Government of the Labor Party of Victoria introduced the Unpaid Wage Bill 2020 (“Bill”) to address the general problem of unpaid businesses and workers. The law imposes criminal penalties on employers such as:

1. Unauthorized rejection of all or part of an employee’s claim.

2. Forging an employee qualification card to provide financial benefits to the employer, or to hide previously obtained financial benefits.

3. Do not provide proof of employee eligibility to provide financial benefits to the employer or to hide previously obtained financial benefits.

“Employee qualifications” means an employer, including wages or salaries, allowances, vacation qualifications, meal breaks, or severance pay, in accordance with applicable law, contract, and agreement (whichever is more generous) means the amount or allowance payable to the employee. “Employee qualification record” means the record of the employer of all qualifications to which the employee is entitled (Nikita Matchado, 2021).

The new breach applies to the employer and individuals within the employer. If you are a “civil servant” of an employer, you may be prosecuted for a crime. The definition of “executive” is broad and not limited to owners or directors of the company. Definitions vary by company type, but generally include people with significant decision-making power that can have a significant impact on a company’s financial position, such as company directors, office owners, and partners.

Enforcement and Jurisdiction

Victoria Wage Inspectorate is responsible for investigating crime and enforcing  new legislation. It is permitted to forcefully obtain information or evidence to determine if a crime has been committed.  This means that the inspector may enter the facility with consent and / or with a search warrant to search for and seize relevant documents. If necessary, Victorian police officers can force access to the premises specified in the warrant. Inspectors can also make recommendations to agencies such as the Victoria Police and the Australian Federal Police.

Employers dealing with underpayment issues at the company may not only face criminal charges under the new law, but may also face investigations by the Fair Labor Ombudsman and Victoria Wage Inspectors at the same time (Wage theft bill heralds underpayment scrutiny). It is important for employers to pay attention to their obligation to pay employees the correct wages and qualifications in the context of modern wages, company agreements, or contract terms.

The law extends beyond Victoria to other Australian state and territory-based businesses, or even outside Australia. If the employee provides services within Victoria, or if the employer resides in Victoria (even if the employee resides in another state or outside Australia), or the service is primarily Victoria. The law applies if it is done in the state (even if the employer and employee reside elsewhere). Employers who are based elsewhere but do some business in Victoria should carefully consider whether the law applies.


There are many forms of wage theft. It is widespread and has reached the epidemic rate. Wage theft in Australia has become a business model in many industries, sectors and supply chains. Wage theft arises from the political and regulatory environment that allows it to prosper. The most appropriate agency for identifying, investigating and combating wage theft is the Australian Trade Union Movement. Trade unions need greater authority to enter the workplace, obtain information, and investigate employer compliance with regulations in order to identify and investigate cases of wage theft in Australia. The impact on employers engaged in wage theft is inadequate and needs to be strengthened.


Dawana Wright, Mark Pulvirenti, . (2021, August 27). Wage Theft: Addressing Employee Underpayments in Australia. Retrieved from FTI Consulting: https://www.fticonsulting.com/insights/articles/wage-theft-addressing-employee-underpayments-australia

Nikita Matchado, K.-A. M. (2021, July 15). Australia: Victorian wage theft laws come into effect from 1 July 2021. Retrieved from GlobalCOmpliance News: https://www.globalcompliancenews.com/2021/07/15/australia-victorian-wage-theft-laws-come-into-effect-from-1-july-2021-30072021/

Wage theft bill heralds underpayment scrutiny. (n.d.). Retrieved from CPA Australia: https://www.cpaaustralia.com.au/public-practice/inpractice/wage-theft-bill-heralds-underpayment-scrutiny

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