Victoria Introduces Bill to Combat Wage Theft

On 18 March 2020, Victorian Attorney-General Jill Hennessy introduced the Wage Theft Bill 2020 (Vic) (“the Bill”) to the Legislative Assembly. The Bill seeks to introduce wage theft offences and to establish the Wage Inspectorate Victoria (“the Inspectorate”). 

Wage Theft Offences

If passed, employers can be held criminally liable for dishonestly withholding an employee’s entitlement, whether wholly or in part. This includes scenarios where the employer has permitted or authorised another person to withhold an employee’s entitlement. This offence is also intended to cover conduct such as cashback arrangements, unlawful deductions, and illegal phoenixing.

Employee entitlement is defined under the Bill to include any amount payable to an employee by an employer, according to the relevant laws, contract or agreement. This includes:

• Wages
• Allowances
• Gratuities
• Superannuation
• Leave

The Bill also proposes a separate definition for dishonesty, specific to these offences, to mean dishonest according to the standards of a reasonable person. This test is an objective test, and is to cover deliberate and reckless dishonesty.

Additionally, the Bill also seeks to introduce offences for falsifying employee entitlement records and failing to keep records. Falsifying records includes producing, making, or copying a record that is misleading, false, or deceptive. Altering a record or providing false information in order to falsify or alter a record is also included in this offence. Under these proposed offences, the employer in falsifying or failing to keep employment entitlement records, must be shown to do so, in order to:

• Gain a dishonest financial advantage
• Prevent the exposure of the falsification or failure to keep the records

These offences also include instances where the employer has dishonestly permitted or authorised another person to falsify or fail to keep a record.

The proposed offences are to apply to all employers and their officers. For bodies corporate, the maximum fine is set at $991,320. For individual employers, they face a maximum penalty of 10 years imprisonment.

The Wage Inspectorate Victoria

In addition to introducing these new wage theft offences, the Bill proposes the establishment of the Inspectorate. The Inspectorate is intended to be an independent statutory body that will enforce, investigate, and prosecute the proposed offences.  The Bill proposes that the Inspectorate be led by a Commissioner to be appointed at a future date, and to have a dedicated criminal law enforcement arm that is to be independent and not subject to Ministerial direction or control.

The Inspectorate is to have powers to enable its officers to inquire and investigate employee entitlement offences, and bring criminal proceedings where there is evidence of an offence. Wage theft inspectors are to have investigative powers including:

• Power to enter premises
• Obtain information and documents
• Seize evidence
• Request attendance under oath or affirmation before the Inspectorate
• Apply for search warrants
• Execute search warrants
• Enter into and accept undertakings

The Bill also suggests that the Victorian Inspectorate (“the VI”) be responsible for oversight of the Inspectorate. The VI is to have the power to investigate, assess, and monitor the conduct of the Inspectorate’s inspectors. Additionally, the VI will have to report on and make recommendation on the performance of the Inspectorate’s functions.

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Wage Theft Bill 2020 (Vic) and supporting documents available from TimeBase’s LawOne Service