Legal Update

Another State Criminalises Wage Theft

Authors: Amy Zhang, Amelia Dowey & Tracey Xue

On 9 September 2020, the Queensland Legislative Assembly passed the Criminal Code and Other Legislation (Wage Theft) Amendment Bill 2020 (Qld) (“the Bill”). Queensland now joins other Australian jurisdictions that have recently passed legislation criminalising wage theft, following Victoria and the ACT.

The Bill received royal assent on 14 September 2020 (Criminal Code and Other Legislation (Wage Theft) Amendment Act 2020 (Qld) (“the Act”)). The offences under Part 2 of the Act have now commenced and are in force. Other amendments under Part 3-5 of the Act will come into effect on a date yet to be fixed by proclamation.

Part 2 of the Act amends the Criminal Code Act 1899 (Qld) (“the Criminal Code”) to explicitly include wage theft as a criminal offence. The Act amends the definition of stealing under s 391 of the Criminal Code to include failures to pay an employee in relation to the performance of work by the employee an amount payable under legislation or an industrial instrument or agreement. Further, the Act provides that ‘an amount payable to the employee in relation to the performance of work by the employee’ is a thing capable of being stolen. As suggested by the explanatory note, the Act is intended to capture a broad range of payments such as:

• unpaid hours or underpayment of hours;
• unpaid penalty rates;
• unreasonable deductions;
• unpaid superannuation;
• withholding entitlements;
• underpayment through intentionally misclassifying a worker including via a wrong award, wrong classification or by ‘sham contracting’ and the misuse of Australian Business Numbers; and
• authorised deductions that have not been applied as agreed.

Secondly, the Act amends the penalty for fraud under s 408C(2) to provide that where the offender is or was an employer of the victim they will be liable to imprisonment for 14 years, which is the equivalent to the existing penalty for fraud where the offender is the employee. For the offence of stealing, the Act amends s 398 of the Criminal Code to provide that employers are liable to imprisonment for 10 years, which reflects the length of imprisonment as provided in the Wage Theft Act 2020 (Vic).

The Act also amends the Industrial Relations Act 2016 (“the IR Act”) in order to introduce a procedure for wage theft recovery claims, which is covered by the definition of “unpaid amount claim” under the IR Act. The new Division 4 of the IR Act has been introduced to confer jurisdiction to the Industrial Magistrates Court to determine wage recovery claims for matters of not more than $20,000. The introduction of Division 4 – Subdivision 2 provides a conciliation process for unpaid amount claims, and states that the registrar may refer an unpaid amount claim to conciliation. Under the new s 507D, Industrial Relations Commissioners will act as conciliators for unpaid amount claims.

The Act differs from the Wage Theft Act 2020 (Vic) that was recently passed as it amends the existing criminal code, as opposed to introducing a new Act of Parliament to cover wage theft. Arguably, this legislative decision reflects the shift in characterising wage theft as a criminal act as opposed to an administrative error.

Evidently, there is a trend within state and territory legislatures to criminalise wage theft in order to tackle the policy problem of employers using underpayments to lower their operating costs. As noted by the explanatory notes of the Act, wage theft affects 437,000 workers in Queensland and costs them approximately $1.22 billion in wages and $1.12 billion in unpaid superannuation each year.

In the remaining states and territories that have not yet criminalised wage theft, the Western Australian Industrial Relations Minister introduced the Industrial Relations Legislation Amendment Bill 2020 (WA) on 25 June 2020 to create stronger compliance and enforcement provisions to address wage theft; while the SA legislature has been considering wage theft since 2019. On the Commonwealth level, the Attorney General and the Prime Minister have both given indications that a wage theft bill will be introduced soon, however, a bill is still yet to be tabled in Parliament.

Given two major states, Queensland and Victoria, have now criminalised wage theft, employers must be vigilant in ensuring that their payroll systems are complying with fair work laws and industrial instruments. Whilst NSW and the Commonwealth Government have yet to introduce wage theft legislation, the continuing trend indicates it may only be a matter of time before wage theft is criminalised in all states and territories and at the Commonwealth level.

Please see our previous legal update (https://harmers.com.au/legal-update-9/) for more information on the Wage Theft Act 2020 (Vic).

For more information or if you require advice and assistance regarding the above, please contact our Harmers team on +61 2 9267 4322.

Sydney: +61 2 9267 4322 | Melbourne: + 61 3 9612 2300 | Brisbane: + 61 7 3016 8000

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