In a win for employees, from 1 July 2021 it became a crime in Victoria for an employer to:

• deliberately underpay employees
• dishonestly withhold wages, superannuation or other employee entitlements
• falsify employee entitlement records to gain a financial advantage
• avoid keeping employee entitlement records to gain a financial advantage.

An ‘employee entitlement’ is any amount of benefit that is owed to an employee by an employer, including:

• wages or salary
• allowances
• leave entitlements
• meal breaks
• superannuation
• contracts
• agreements.

These crimes are punishable by a fine of up to $218,088 or up to 10 years’ jail for individuals and a fine of up to $1,090,440 for companies.

The new legislation comes under the Victorian Government’s Wage Theft Bill (The Bill) which aims to address common underpayment issues affecting businesses and employees through the use of the Wage Inspectorate.

What is the Wage Inspectorate?

The Bill establishes a new statutory body, known as the Wage Inspectorate, which has various functions including:

• informing and educating people about their rights under The Bill
• monitoring and promoting compliance with The Bill
• investigating possible offences
• bringing criminal proceedings in relation to offences.

The Bill also makes it an offence to intentionally disallow, obstruct or hinder the Wage Inspectorate from performing their functions.

Wage theft offences involve deliberate and dishonest conduct. Honest mistakes made by employers who exercise due diligence in paying wages and entitlements are not considered wage theft.

AFS perform a range of assurance services to ensure employers are compliant and have correctly interpreted and applied awards, agreements or employment contracts. We can test the accuracy of your current wage payments, perform agreed upon procedures over compliance obligations or help you with an internal audit of how you manage the risk associated with under or over payment and compliance with payroll laws and regulations.

Please contact Adrian Downing, Audit Partner, if you would like to discuss how AFS can help you further. Call 03 5443 0344 or email afs@afsbendigo.com.au