On 7 December 2023, the Commonwealth Government passed the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Cth), which received royal assent on 14 December 2023.

In Victoria, wage theft legislation already exists (Wage Theft Act 2020 (Vic)). The Victorian Chamber understands the Victorian Government intends to repeal the state law considering the introduction of the new federal law.

It is therefore important for businesses to understand the change and prepare for its implementation.

How will it work?

Starting on 1 January 2025 (or the day after the Voluntary Small Business Wage Compliance Code is first declared by the Minister for Employment and Workplace Relations), it will become a criminal offence for businesses and/or individuals within a business to intentionally engage in conduct that results in an underpayment to employees.

The penalty for wage theft is a maximum penalty of 10 years’ imprisonment and/or a maximum fine of the greater of:

• three times the amount of the underpayment, if the court can determine that amount; or
• for an individual, 5,000 penalty units ($1,565,000); or for a body corporate, 25,000 penalty units ($7,825,000).

A small business (15 employees or less) that is found to have underpaid their employees may not be criminally prosecuted if it can be shown that the business has complied with the Voluntary Small Business Wage Compliance Code (which is currently being developed by the Department of Employment and Workplace Relations).

The Fair Work Ombudsman (FWO) is responsible for investigating underpayments and will refer matters to the Commonwealth Director of Public Prosecutions or the Australian Federal Police for prosecution under the new Commonwealth wage theft law.

How the Victorian Chamber can help

To reduce the risk of underpayment or engaging in conduct that results in an underpayment, businesses should consider conducting a compliance check to assess whether employees are classified in line with the correct modern award, as well as perform a wage audit to ensure the right entitlements are applied.

The Victorian Chamber Workplace Relations Consulting Team has developed a package called HR Comply to help businesses complete this compliance check. HR Comply is a targeted compliance assessment on award coverage and classification assessment for your business, followed by a comprehensive wages and conditions audit to ensure you are paying your employees their minimum entitlements under a modern award or enterprise agreement.

Workplace Relations support

Our experienced consultants at the Victorian Chamber are here to support you to ensure compliance with workplace laws and regulations.

To access our consulting services please call the Victorian Chamber Workplace Relations Advice Line on (03) 8662 5222.