Severe punishment on the horizon for employers under potential new wage theft laws

In Federal Parliament on Wednesday, July 24, the Attorney General and Minister for Industrial Relations, The Honourable Christian Porter MP, said that the Government had “zero tolerance” for wage theft, with the Prime Minister, The Honourable Scott Morrison, stating that the Attorney General was working on laws tackling worker exploitation, which may even extend to criminalising wage theft. These comments during question time follow statements earlier in the week from the Attorney General that the appropriateness of the current penalties for underpayment of wages would be examined by the Government as part of its review of the industrial relations system.

While any such laws are likely to be some time away, the statements on Wednesday are a further reminder of the importance for all employers to comply with their workplace obligations to every employee each time they make a payment to them.

As we have seen from the recent high profile matters in the restaurant industry and franchise sector, the Fair Work Ombudsman continues to be very active in requiring employers to comply and seeking enforceable undertakings from them in respect of which a range of measures, including auditing, training and most recently, “contrition payments” are required.

We have been working with a number of clients on workplace law compliance programs and ensuring that their obligations are well understood. Workplace breaches can cause extreme damage to the reputation of brands and key individuals, so risk management in this area is an essential corporate governance activity.

If you have not already done so, now would be an appropriate time to ensure that your business is meeting all of its obligations. While these obligations are not new, it is clear that the potential consequences for failing to meet them are likely to become more significant.

Contact us to discuss further the measures that we would recommend you adopt to meet all of your obligations to employees and manage any potential risks to your business.