A Senate committee is calling for the criminalisation of wage theft to end the “shameful” practice that often targets vulnerable and low-skilled workers.
According to the report, wage theft does not limit to underpaying wages, penalty rates, superannuation, overtime, commissions and entitlements such as sick, annual, or carer leave.
It also includes practices such as requiring workers to repay money earned or making unauthorised deductions from employee pay.
The committee found that a “vicious cycle of underpayments” was bringing wide impacts upon the economy and pushing wages down across industries.
Another finding by the committee was that employers tended to use power imbalance to take advantage of their workers, with victims more likely to be women and Indigenous people.
“There is a direct link between insecure work and underpayment, reflecting the power imbalance between employers and worker, and workers’ fear of speaking out or seeking redress for fear of losing their jobs,” the report said.
“Vulnerable workers are at higher risk of exploitation due to a range of factors including gender, age, disability, ethnic or cultural background and language barriers.”
The report also discovered that wage theft undermined the economy and adversely affected people’s retirements, causing taxpayers to compensate for the lost wages in the form of increased pension payments.
In addition, it found that the current punishments available for wage theft, which were civil penalties, did not meet community expectations.
Some witnesses voiced opinions that the options to remedy wage theft provided under the existing legal framework did not meet the needs of workers as they were“intimidating, inaccessible, costly, complex, inefficient and ineffective.”
Regarding recommendations, the report suggested that the Fair Work Act be amended to criminalise wage theft and that advertising employment with pay less than the national minimum wage should be prohibited.
The report also recommended that the federal government establish a small claims tribunal that was more efficient in pursuing wage theft and called on the Australian Competition and Consumer Commission and the Australian Securities and Investments Commission to step up their efforts to prevent the illegal practice.
The report quoted an anonymous employee deprived of superannuation, who said that substantial penalties must be imposed on companies to deter them from stealing entitlements.
“If I were to steal money from (my employer), I would be in jail … it needs to work both ways,” she had told the committee.
It was also noted in the above report that 85 percent of penalties levied in the 2020/21 financial year were against the Construction, Forestry, Maritime, Mining and Energy Union and that the industrial reforms proposed by the government in 2020 did include criminal penalties for wage theft but were voted down by the opposition.
