Tackling Wage Theft & Worker Exploitation

In NSW, there have been repeated cases of ongoing, widespread and blatant wage theft – the practice of underpayment and even non-payment of wages and other employment benefits to staff. A majority of these vulnerable workers are young and have recently entered the workforce.

Media reports have exposed a roll call of major household brands such as 7-Eleven, Domino’s, Pizza Hut, Caltex and United Petroleum of routinely underpaying and cheating workers – on a systematic scale. It is clear that these activities were a fundamental part of the business model. At 7-Eleven, repayments have reached over $150 million – an average of $39,089 for each of the workers who were underpaid.

In Wollongong, a Facebook campaign identified systematic underpayment of young workers by over 50 businesses. Many young people were being exploited, with some being paid close to only half of what they should legally be earning. Others routinely worked as many as 20 hours a week unpaid as part of a so-called “work trial” that could last days or weeks. Examples included requiring up to a one-month “unpaid trial” with no guarantee of shifts, paying as little as $8 per hour, requiring young people to work 10 hours with no break; and employers taking 50% tax from those working off the books.

Current penalties are not tough enough – the Fair Work Ombudsman, Natalie James, gave evidence to a Senate Committee in April 2017 that a minority of employers flouted the law and risked existing fines because they were not severe enough to act as a deterrent. Further, federal and state inspectorates do not have the resources to extensively audit businesses that are stealing wages, superannuation and workers’ compensation premiums.

That is why, in a major move that confirms Labor’s timeless commitment to protect working people, NSW Labor unveiled a comprehensive package to outlaw the exploitation of vulnerable workers, starting with a pledge to criminalise wage theft.

Labor’s five-point plan will see:

  • A new wage theft law to criminalise deliberate failure to pay wages and entitlements – providing appropriately tough criminal penalties against companies, the possibility of jail for individuals and prosecutions able to be brought by law enforcement agencies, affected persons and unions;
  • New laws to hold head franchisors accountable for the actions of franchisees –  making them liable for what takes place in their franchise network regarding workplace safety, wages and other employment conditions;
  • Widened powers of NSW workplace inspectors to proactively undertake wage audits – to ensure compliance with the requirement to pay NSW workers’ compensation insurance, and to recover unpaid wages and superannuation;
  • A licensing scheme for labour hire companies to force compliance with existing labour laws – ensuring they provide safe, fair and reasonable work conditions to workers, including the same pay and conditions as direct employees on a site; and
  • New laws to protect Sunday penalty rates – legislating so that penalty rates and any other above ordinary hours payment for Sunday work under NSW State Awards and Agreements cannot be cut.

Employers that routinely rip off their workers by stealing their wages will be targeted with tough new laws that will attract the heaviest fines in Australia and jail terms for individuals.

Labor’s new laws won’t apply to genuine mistakes. Employers who do the right thing will benefit as they won’t be competing with under-cutting cheats. But these laws will go after that minority whose business model is based on exploitation.

Labor has also announced it will:
  • Require businesses to publicly display minimum wages rates paid to staff with their business registration where patrons and public can see;
  • Place businesses found to have breached the law on a public “name and shame” register, and make them ineligible to participate in future contracts with the NSW Government;
  • Ensure disputes and other issues regarding apprenticeships and vocational training which are regulated by State law can be heard in the Industrial Relations Commission; and
  • Give the Industrial Relations Commission the power to order the payment of any unpaid superannuation, together with any unpaid wages and other employment conditions not provided.

Vulnerable workers are being cheated out of a staggering amount of wages by unscrupulous bosses and it has to stop.

However, the NSW Industrial Relations Minister, Dominic Perrottet has refused to commit to new and improved protections for young workers aimed at preventing such exploitation and wage theft in the State.

The Liberals won’t act – but Labor will. Only NSW Labor has a positive plan to combat this critical problem.