The Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 received Royal Assent on 14 December 2023, warning employers to take action in undertaking the necessary preparation for the criminalisation of wage theft set to take effect in 2025.
The Bill has been divided into two parts. Amendments referring to wage theft are included in both Parts 1 and 2. The Fair Work Legislation Amendment (Closing Loopholes No.2) Bill 2023 (Closing Loopholes Bill No 2) is yet to be passed, however the Albanese Government has announced that it is committed to achieve this early next year.
Chamberlains Law Firm previously published an article summarising the proposed amendments and the motives behind them. (See related Article “Boss Better Have My Money!” – Australia’s Wage Theft Phenomenon – Chamberlains Law Firm for further information)
Criminalising Wage Theft – What Do You Need To Know?
The amendments have raised the stakes significantly for employers found to be liable of contraventions, namely those who engage in the conduct of deliberately underpaying their employees.
Below we set out the key changes warranting any employers consideration.
By 1 January 2025, imprisonment terms of up to 10 years and fines of up to $7.8 million will be faced by employers (including individual directors) who deliberately withhold payment of employee’s wages and superannuation. It is important for employers to be aware of the court’s discretionary consideration of the ‘intention’ element under the new provisions.
Particularly those who recently or currently are on notice for either deliberate or accidental underpayment of employees, the court may consider this as knowingly continuing a practice and thereby a contravention under the new laws effective in 2025. By the same token, any similar conduct which occurs prior to 2025 may still be considered a criminal offence in 2025 under the new laws. Therefore, it is imperative that employers undertake a compliance audit of their employee payroll and management practices to remedy any previous, current and future underpayments.
“I’m A Small Business! Help!”
The Albenese Government will extend an olive branch to small businesses (those with 15 employees or less) and offer protection before the new laws take effect. Small businesses will be provided with additional support and assistance to mitigate an unintended consequence of the amendments. Most notable of this support and assistance is:
- extra funding allocated to the Fair Work Ombudsman to facilitate further protection and assistance for small businesses; and
- the introduction of a Small Business Code of Conduct which will be developed prior to the wage theft laws effective date.
Senator Jacqui Lambie assured; “in this legislation we’ve ensured that small businesses are looked after but I can assure you that it is a long way from being a free pass.”
Strike While The Iron Is Hot
Employers of all sizes are strongly urged to act now to further secure protection of your business and remove any potential liabilities. However, this is often not an easy task and requires professional expertise. With the New Year calendar clocking over, now is an optimal time to exercise due diligence and review your organisation’s compliance with the State and Federal Legislation. The Workplace Law team at Chamberlains Law Firm can save you the headache and ensure your organisation is compliant with both current and upcoming legislation to mitigate any potential contraventions.
This article was prepared with the assistance of Isabella Turner.
If you have any questions or concerns please contact our Workplace Director Angela Backhouse on 6188 3600.