Wage Theft (QLD)

Wage theft is the underpayment of wages or entitlements to an employee by an employer. It can include paying less than the mandated minimum wage, not making required superannuation contributions, and withholding entitlements such as leave and penalty rates.

Wage theft as an offence

In September 2020, Queensland Parliament passed the Criminal Code and Other Legislation (Wage Theft) Amendment Act 2020. The Act followed a 2018 Parliamentary Committee Inquiry and resulting report “A fair day’s pay for a fair day’s work? Exposing the true cost of wage theft in Queensland”, which found wage theft was prevalent across the state.

The Act inserted Section 391(6A) into the Code to allow wage theft to be prosecuted as stealing, and inserted Section 398(16) to increase the maximum penalty for stealing by an employer to 10 years imprisonment (compared to the maximum of five years imprisonment for a general stealing offence).

The offence captures a range of violations, including:

• unpaid hours;
• unpaid penalty rates;
• unreasonable deductions;
• unpaid superannuation;
• withholding entitlements;
• underpayment via intentionally misclassifying an employee by “sham contracting” and misusing Australian Business Numbers.

The Act also amended Section 408C of the Code to have the definition of fraud include where the offender is or was an employer of the victim. An employer who commits fraud against an employee is liable to a maximum of 14 years imprisonment.

The Industrial Relations Act 2016 was amended by the Act to allow wages claims up to $20,000 to be made in the Industrial Magistrates Court. Changes were also made to the Magistrates Court Act 1921 and the Queensland Civil and Administrative Tribunal Act 2009.

When will an employer commit an offence?

An employer will be liable for wage theft if they intentionally fail to pay what is owed to an employee when the amount is due. Queensland Police is the initial agency to investigate allegations of wage theft.

Who could be an accessory?

An individual employer or a company can be charged with wage theft. A company director or senior officer can be liable for wage theft if it can be demonstrated they were an accessory to the commission of the offence. To be considered an accessory, the person must intentionally encourage or aid the company’s actions, and must have actual knowledge of the essential circumstances of the conduct.

Why is wage theft happening?

There are complex and varied reasons for the incidence of wage theft.

The 2018 Senate Inquiry report stated underpayment in the hospitality, food services, retail, farming, and produce sectors was rife due to a “perfect storm” of:

• the insecure nature of the work;
• many migrant and young workers;
• already low wages;
• desperation for work;
• lack of knowledge of workplace rights;
• absence of strong unionisation.

Unions agree wage theft has become commonplace in low-paid industries. They say market pressure is a contributing factor, and that prior to wage theft being criminalised, there was a low likelihood of an employer being caught, and relatively small penalties if they were.

What is the economic impact of wage theft?

The 2018 Senate Inquiry report estimated that more than 437,000 workers in Queensland were being underpaid in some way. The amount in lost wages was estimated to be at least $156.5 million annually. The annual loss from the underpayment or non-payment of superannuation was estimated at $1.12 billion. The resulting drop in consumer spending in Queensland was estimated to be $100 million and the loss in federal income tax revenue to be $60 million.

7-Eleven in Queensland

In 2018, the operators of two Brisbane 7-Eleven stores were fined $192,961 by the Federal Circuit Court for systematically underpaying workers. The penalties were the result of legal action by the Fair Work Ombudsman (FWO) after it found 21 employees at two stores had been underpaid $31,507.27 over 12 months.

The company which operated one store was fined $88,140, the company which operated the other store was fined $68,262, and a director of both companies was fined $36,559. The fines included penalties for failing to meet record-keeping and payslip requirements, such as not  recording cash payments made to employees.

FWO inspectors found workers at both stores had been paid flat rates for all hours worked, resulting in significant underpayments of penalty rates, overtime and shift work rates mandated under the General Retail Industry Award 2010. Individual underpayments ranged from $98.36 to $5080.16.

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