The new buzz word in Canberra and the trade union movement is ‘wage theft’. This criminal act (theft) is being used to describe any circumstances where an employee has been underpaid. Employers must take care to ensure employees are paid correctly. 

Guess what? Employers are now being demonised as thieves. 

The new headline grabbing buzz phrase is ‘criminalising wage theft’.  

This implies that whenever there is a wages error it is a deliberate act by the employer. 

Not so. 

Only a very small minority of employers who underpay employees do so deliberately. 

Hunter Employee Relations has assisted employers for many years in making sure employees are paid correctly. Sometimes we have discovered errors that lead to back payments to employees. 

Most cases of underpayment have resulted from errors made in the interpretation of Awards and Agreements – without any deliberate intention.  

Because of the media attention to ‘wage theft’ some employees are now viewing any corrections to their pay in a negative sentiment and asking, “what else does my employer owe me?”

If we consider that some very large organisations, with the financial resources to employ industrial relations specialists, have made significant underpayment errors, smaller employers are left wondering how they can possibly get it right. 

Part of the problem lies in the way Awards are written which are rarely user friendly. For instance, they may leave room for several interpretations of a particular hours of work clause wording.  

Another area for error is where two clauses compound an entitlement. This can be quite confusing. 

It’s easy to get it wrong. 

So, what’s changing: 

• The low-cost small claims legal process has now increased the cap to $100,000 making it easier and cheaper for employees to seek redress for underpayment in the courts. 
• The new wage theft provisions for intentional underpayments (including Superannuation) will allow for imprisonment or fines totalling three times the amount of the underpayment. 
• A Voluntary Small Business Wage Compliance Code will be developed by government in partnership with employer and employee groups to assist small business. At this stage it is unclear how this will operate. We’ll provide you with further information when it becomes available.
• Unions can apply to the Fair Work Commission to wave the normal 24-hour access notice period to a workplace to allow them to investigate suspected underpayments to a member of their organisation. Given payroll systems are often centralised in large organisations or outsourced by small employers it is unclear why this change is required under legislation.  

Employers should review and rectify problems before a union or the Fair Work Ombudsman become involved. 

Contact Hunter Employee Relations to discuss how you are applying the relevant Award or Agreement in your business. 

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Kind Regards
Michael Schmidt
M 0438 129 728
[email protected]
www.hunteremployeerelations.com.au

 Industrial Relations - Employment Law - Workplace Performance