Wage theft has reached pandemic proportions

Australia’s first criminal case over wage theft is under way, with charges laid against the owner of a Victorian restaurant that allegedly underpaid staff by thousands of dollars.

If found guilty, the owner of the Macedon Lounge, northwest of Melbourne, faces a fine of more than $1 million and potentially jail time under Victoria’s Wage Theft Act.

The law came into effect in July 2021. The Andrews Labor government promised it before the 2018 state election, as evidence mounted that existing civil penalty fines were not a sufficient deterrent.

This week Unions NSW called for national action in a report on underpayment of migrant workers. This was based on an audit of job advertisements on Chinese, Korean, Nepalese, Punjabi and Spanish websites. It found 70% offered less than minimum rates.

The Albanese government also made a pre-election promise to criminalise wage theft, as part of its Secure Australian Jobs Plan:

Wage theft rips more than $1 billion off Australian workers each year. The Morrison government doesn’t think it’s a problem, but Labor does, and we will make wage theft a crime at a national level.

This was left out of the omnibus amendments to the Fair Work Act passed last week. It’s unclear whether the government will pursue this further in its first term.

But criminalisation may not be the best approach. Other reforms are just as important.