Employee underpayments in focus as Senate establishes wage theft inquiry

15 Nov 2019

Following a number of recent high-profile underpayments, the Senate has established an inquiry into the causes, extent, and effects of unlawful non-payment or underpayment of salary and superannuation, and measures to address the issue.

The Wage Theft Inquiry's scope

On 13 November 2019, the Senate referred to the Economic References Committee an inquiry into wage and super "theft" by employers.

The Committee will inquire into:

  • the reasons for wage theft;
  • the cost of wage and super theft to the national economy;
  • uncovering wage and super theft;
  • tax treatment for individuals subject to wage theft;
  • potential extension of liability and supply chain measures to drive compliance;
  • recovery and deterrence mechanisms; and
  • potential modification of government procurement practices to exclude organisations engaging in wage or super theft.

Increased focus on underpayment claims

The inquiry comes amidst a number of large employers coming forward in recent months and admitting to underpayments. The Fair Work Ombudsman has expressed frustration at the upsurge in large-scale employers admitting underpayments.

Separately, the Federal Government has also announced that it is committed to introducing criminal sanctions to stamp out deliberate and systematic wage theft by employers. Two discussion papers have been released and submissions closed on 1 November 2019. The Government has indicated that work on legislation is underway, and feedback from the discussion papers will help inform the development of a new offence and penalty regime, which will include significant jail terms and fines for the most serious offences.

What's next

The Committee is required to provide its report by the last sitting day of Parliament in June 2020.

In the meantime, employers should consider whether they wish to make a submission to the Committee. The Committee is yet to provide information regarding the submission process for the inquiry, however further details are expected to be provided soon.

If you'd like to know more about the inquiry, require assistance to review your own payment arrangements, or you are considering making a submission, please get in touch.

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