Employers face ten years in prison and maximum fines of $8 million or up to three times the stolen sum if it exceeds the cap, under new criminal sanctions in the Albanese Government’s “Closing Loopholes” legislation, to be introduced into Federal Parliament today.
Workplace Relations Minister Tony Burke says the new regime marks “the first time the level of penalty can be proportionate to the extent of the underpayment”.
The Government foreshadowed the changes in a consultation paper in April, although at that time it floated a $4 million maximum penalty.
Burke told the ABC’s Insiders program yesterday that the Government’s objective “is not to send people to gaol, the objective is to make sure that people are paid properly”.
He said the threat of prison “will sharpen the minds of the very few people who’ve engaged in this intentionally”.
Burke said in a statement that “pathways” will be available to employers who self-report and take reasonable steps to repay the correct amount.
The Fair Work Ombudsman (FWO) will be able to exercise discretion to not proceed with criminal proceedings if businesses enter “cooperation agreements” and the watchdog will continue to have access to enforceable undertakings for civil breaches.
Burke said the Government will also raise the maximum fines for underpayment-related provisions, in line with recommendation 5 of the migrant workers taskforce report.
The FWO will receive an extra $32 million over four years to implement the wage theft reforms.
Burke said the new penalties will apply from the start of next year while the wage theft offence will begin by proclamation no later than the start of 2025.
He said in a joint announcement with Small Business Minister Julie Collins that the Government will develop a Voluntary Small Business Wage Compliance Code to provide certainty for those who inadvertently underpay wages, “ensuring only intentional wage theft is punished”.
Industrial manslaughter to be criminal offence under federal law
Burke said yesterday that the “Closing Loopholes” legislation will also make industrial manslaughter a crime, with individuals facing imprisonment for up to 25 years and body corporates fines of up to $18 million.
Burke said the changes to the Federal OHS laws will also increase maximum penalties five-fold, to $15 million for category one offences involving reckless or criminally negligent breaches of OHS duties, while maximum imprisonment will rise from five to 15 years.
The changes will take effect at the start of July next year.
