WageSafe Wage Theft Laws

Both the Queensland and Victorian State Governments have in recent times passed legislation that increased the severity of the consequences for employers deliberately underpaying their employees.

This has come along with a shift in attitudes towards employment, and more specifically, payroll compliance brought on by a number of high profile businesses found to be underpaying their employees.

Queensland Wage Theft Laws

In September 2020, the Queensland criminal code was amended through the passing of new Wage Theft legislation. This legislation:

  • allows the prosecution of wage theft as an offence of stealing;
  • provides that stealing or fraud by an employer towards an employee attracts an increased maximum penalty; and
  • allows for civil claims for unpaid wages through the Industrial Magistrates Court.

The offence or stealing or fraud covers a broad range of payments and entitlements including:

  • unpaid hours or underpayment of hours;
  • unpaid penalty rates;
  • unreasonable deductions;
  • unpaid superannuation;
  • withholding entitlements;
  • underpayment through intentionally misclassifying a worker including 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.

The legislation also allows for timely and informal resolution of matters and allows the Queensland Industrial Magistrates Court to hear federal claims under the Fair Work Act and State system employees under the Queensland Industrial Relations Act. The maximum penalty for stealing by an employer is 10 years imprisonment and for fraud up to 14 years.  You can read the Act here.  You can read the Explanatory notes here.

 Victorian Wage Theft Laws

In June 2020, the Victorian Parliament passed the Wage Theft Act 2020. The legislation in Victoria refers to wage theft as ‘employee entitlement offences’, which include the following:

  • Dishonestly withholding the whole or part of an employee entitlement;
  • Falsifying an employee entitlement record to dishonestly obtain, or to prevent the exposure of, a financial advantage; or
  • Failing to keep an employee entitlement record, to dishonestly obtain or prevent the exposure of a financial advantage.

“Employee entitlement” means an amount payable by an employer to or in respect of an employee, or any other benefit payable or attributable by an employer to or in respect of an employee, including wages or salary, allowances and gratuities, and the attribution of annual leave, long service leave, meal breaks and superannuation.

In Victoria, the legislation has also created a Wage Inspectorate and the position of Commissioner. The role of the Inspectorate is to investigate and prosecute wage theft offences. Additionally, it is the Inspectorate’s role to educate and assist employees as to their rights in the workplace. This includes promoting and monitoring compliance and publishing guidelines to assist employers in ensuring their payroll compliance.

The maximum penalty is a fine of $991,320 and 10 years’ imprisonment.  You can find a copy of the Act here.

Payroll Failures

These legislative changes are a further reminder of the need to ensure that you are paying your employees correctly.  Over the past 18 months, payroll and HR system failures have caused multi-million dollar wage back-payment claims and exposed businesses to potentially huge fines and now potentially criminal wage theft prosecutions as well.

If well-respected and trusted businesses such as Woolworths, Coles, Bunnings, the ABC and the National Library can make these mistakes in their payroll, with their well-resourced HR Departments and Payroll offices, then it can happen to any business!

Many businesses, franchises included, now rely on outsourced payroll systems to ensure compliance, but often we find the people given the task of managing those systems appear to have been ‘asleep at the wheel’, or at best unaware of areas of non-compliance with our complex system of industrial awards and agreements.

Board members and senior management need to focus on this now due to the associated reputational damage if their organisation gets caught out, not to mention the unfunded liability hurting their business’ share price, liquidity or from huge fines.

Franchisors should also be aware of the need to take reasonable steps to ensure they don’t become liable for their franchisees’ non-compliance with our employment laws.

WageSafe Case Study

Payroll Compliance


The use of time and attendance, and payroll systems has clearly been shown to not be enough to prevent underpayments. Whilst they may have no issues in the vast majority of cases, there are often complex scenarios that these systems don’t deal with correctly. Due to this, it is important for businesses to seek assurance that they are paying employees correctly, which has traditionally been done through historical payroll audits.

WageSafe offers a new alternative to this. Audits have a limited scope and often require significant more time and money to complete. The large investment required to complete the audit, and then potential back payments a business must make, is enough for some businesses to decide to run the risk of being caught underpaying their staff.

WageSafe is a cheaper alternative. Through continuous, automated payroll checking, WageSafe doesn’t need the sort of manual work required in an historical audit. Additionally, the scope WageSafe covers is much larger due to the integration with your payroll, time and attendance and other systems, such as your HR Information Systems where you have them.

Then if a problem area is identified, it they can be corrected almost immediately rather than growing into something that becomes very difficult or very expensive to address.

Interested in WageSafe? Get in contact with us here.

Aug 5, 2021

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