Wage theft legislation passed in Victoria

Christine McGinn
Bosses who steal money from Victorian workers will now face the full force of the law

Bosses stealing wages from Victorian workers could spend up to a decade in jail after legislation passed making it a criminal offence.

The Victorian Legislative Council passed Australia's first legislation to make wage theft a criminal offence on Tuesday night.

Employers who dishonestly withhold wages, superannuation or other employee entitlements, could be fined up to $198,264 for individuals, $991,320 for companies and up to 10 years' jail.

There are also new record-keeping offences to target employers who try to hide wage theft by falsifying or failing to keep proper account.

The legislation establishes the statutory authority Wage Inspectorate of Victoria to investigate and prosecute wage theft.

Employers who make honest mistakes or who exercise due diligence in paying wages and entitlements won't be guilty under the laws.

Attorney-General Jill Hennessy said this reform held employers to account.

"We promised to criminalise wage theft and we have delivered on that promise - employers who steal money and entitlements from their workers deserve to face the full force of the law," she said.

Victorian Trades Hall Council Secretary Luke Hilakari said bosses who steal money from workers will now face the full force of the law.

"This is momentous and pivotal for working people in Victoria, who have been saying enough is enough, it's time wage theft is a crime and bosses stealing wages are properly punished so that wage theft as a business model comes to an end," he said in a statement.

Shine Lawyers head of employment law Samantha Mangwana said wage theft was already a crime, but it hadn't stopped employers.

"Victoria is now leading the country by escalating the severity of the sanctions available and enforcing proper record-keeping," she said on Wednesday.

The United Workers Union said these are the stiffest wage theft laws in the country, and follow their long campaign.

But the Coalition and employer groups fear the laws duplicate the federal system, with scope for possible double punishment.

The federal government is also developing its own laws to criminalise wage theft, while the federal Fair Work Ombudsman similarly regulates employment issues without the threat of imprisonment.

Member of the Eastern Victoria Region Edward O'Donohue said during the second reading of the bill that the Liberal-Nationals supported a federal industrial relations system.

The Victorian Chamber of Commerce and Industry said in March that wage theft laws put Victoria's business environment at risk.

"Business and workers need a national approach. Unnecessary and confusing state-by-state approaches will damage the business environment and discourage employment," it said.

"There is a real risk that this proposed law could face constitutional challenges based on an inconsistency between a state law and a Commonwealth law."

The new Victorian new laws come into effect next year.