Wage theft, we have not forgotten about you!
Over the last eight months, the employment landscape has largely been focused on dealing with the challenges associated with Covid-19.
Quick fire legislation has been developed in the JobKeeper Payment scheme, employers have utilised the stand down provisions in the Fair Work Act in ways that have not been done before and employers have unfortunately been required to make some very tough business decisions.
While all this has been going in, sitting quietly in the back of room, whistling to itself in an attempt not to be noticed is the news that was at the forefront of employment headlines prior to Covid-19; wage theft.
Wage Theft: Still a priority!
With everything that has been going on employers may be excused for thinking that this was no longer the priority, it hasn’t really featured in recent headlines, but they would be wrong about that.
In the years leading up to the start of 2020, the Fair Work Ombudsman (FWO) has become increasingly active in regard to wage recovery. In their annual report for financial year 2018/19, they reportedly recovered $40M for 18,000 underpaid employees for that financial year alone. This came off the back of their announcement earlier that year of their ‘compliance and enforcement priorities’, featuring highly was the underpayment of wages across certain industries[i]. Findings against employers have resulted in fines, large sums of unpaid wages rightfully needing to be paid to employees and of course, the negative media coverage associated with this.
To add to this, three of the States have introduced legislation, which criminalises wage theft, WA legislation is currently being reviewed and Victoria has confirmed its Wage Theft Bill will come into effect in July 2021. More recently, the QLD Government introduced its Criminal Code and Other Legislation (Wage Theft) Amendment Bill 2020, which similar to the other two States, brings criminal charges, fines and potentially imprisonment to those employers found guilty of wage theft.
In recent times, Mapien has partnered with a number of clients, of varying sizes and across various industries, to assist in reviews of their positions, compliance with employment instruments, Modern Award interpretation and instrument coverage.
The work we have done has been a mix of employers who have self reported to the FWO, who have sought to audit their business for compliance, because of the media coverage of the issues, and those who have entered into Enforceable Undertakings following findings being made against them.
Consistent across all cases Mapien has investigated to date, has been three key themes:
- Employers and employees are unaware that the underpayment is taking place;
- There is considerable debate and confusion about instrument coverage due to a complicated legislative environment; and
- There is often an assumption by employers that because they employ someone on a ‘salary’, the applicable Modern Award does not apply.
Regardless of the reasons for the underpayment or ‘wage theft’, the State Governments have made it clear that even though there is a lot going on in the employment space right now, wage theft has not gone unnoticed.
Now more than ever, with criminal legislation being implemented, it is vital that employers get it right when it comes to Award coverage, staff appointment and the recording of hours.