As the term suggests, wage theft is the underpayment of wages to employees. In some cases, wage theft can also include non-payment of wages to employees. Wage theft is a significant issue under employment law.
Sadly, wage theft is a common occurrence across many industries in Australia. Research suggests that international students are disproportionately impacted by wage theft in the country.
Moreover, casual workers, and shift workers are also affected by underpayment issues. Similarly, over the years, migrant workers have been suffering a lot due to wage theft.
Among various issues that fall under employment law, wage theft can be particularly complicated because it is not easily identifiable.
Moreover, due to fear around losing their jobs and facing challenges in obtaining new employment, victims of wage theft often refrain from proceeding with legal action against their employers.
However, by taking legal actions, people who have faced disadvantages due to wage theft can be eligible to receive the money they are owed by employers.
Signs of wage theft
There are certain indications, or red flags, that should be noted in cases of wage theft.
Firstly, each region has minimum wage rules that every industry needs to abide by. The Fair Work Act (2009) sets out the legislation on minimum wages.
A common sign of wage theft is when a person is being severely underpaid in comparison to the minimum wages.
In some industries and sectors such as 24/7 fast-food restaurants or convenience stores, workers are often required to work overnight. These employees should receive wages that is higher than their usual pay.
This is known as penalty rates. They are applicable for weekends, overnight hours, and public holidays. Employers who fail to apply penalty rates when paying employees who have worked on weekends or holidays are committing wage theft.
International students who have only recently arrived in Australia may not be aware of such regulations. Employers tend to take undue advantage of this and pay them less wages, even if they are legally eligible to receive more. In some cases, not being given sick leaves, or annual leaves may also be considered as wage theft.
Legal avenues available
There are different legal avenues available for those who have suffered because of wage theft. Notably, in Victoria, the Wage Theft Act (2020) specifically addresses this issue.
In Australia, the Fair Work Ombudsman (FWO) is the governing authority for all matters related to employment. All aggrieved parties are encouraged to get in touch with the FWO. They provide guidance by organising mediation between the aggrieved party and their employer.
Moreover, the FWO will investigate the case and assist the aggrieved party to launch legal action against their employer. The FWO will also guide the party to start a court case, if required.
It is important to note that in some states, wage theft is a criminal offence. For instance, in Queensland employers engaging in wage theft can be imprisoned for up to 10 years.
Therefore, it is important for all parties who have suffered because of wage theft to fully understand all options available to them. The legal system in Australia provides recourse to aggrieved persons.
It is crucial to acknowledge the issues faced by migrant workers. The exploitation of workers is unlawful, and such acts must be dealt with seriously. For newcomers in Australia, it is important to raise awareness and keep them informed about their legal rights and entitlements as an employee.
John Bui is the Principal Solicitor of JB Solicitors – a family law firm based in Sydney, Australia. He has over 10 years’ experience in family law and commercial litigation. John is also a nationally accredited family law mediator and arbitrator.