What employers need to know
Employers in Queensland who intentionally fail to pay their employees will now be exposed to a criminal penalty of up to ten years’ imprisonment under recent amendments to the Queensland Criminal Code.
What you need to know
- The Queensland Criminal Code was amended on 14 September 2020 to enable wage theft to be prosecuted as stealing and to increase the maximum penalty for stealing by an employer to 10 years’ imprisonment.
- Employers will be criminally liable if they wilfully or deliberately fail to pay an employee – a broad range of non-payments may be captured, including underpayment of hours, unpaid penalty rates and unpaid superannuation.
- An individual employer or a company may be charged with wage theft, and a director or senior officer of a company (or any other person) may be liable if they intentionally assist or encourage a company to commit wage theft.
What you need to do
- Employers need to ensure that their payroll systems are fully up to date and that they are paying their employees in accordance with their legal obligations.
Why is this relevant now?
The Queensland Parliament has passed the Criminal Code and Other Legislation (Wage Theft) Amendment Act 2020 (Qld), which amends the Criminal Code to enable wage theft to be prosecuted as stealing, with employers who intentionally fail to pay or underpay their employees now exposed to a criminal penalty of up to ten years’ imprisonment. These amendments come as a result of a Parliamentary Committee Inquiry which determined that there was endemic wage theft across Queensland.
What does this mean for employers?
An employer will be liable for wage theft if they fail to pay an amount payable to an employee in relation to the employee’s performance of work when the amount is due (under an Act, industrial instrument or agreement) and the employer’s conduct is fraudulent. A broad range of non-payments may be captured, including unpaid hours, underpayment of hours, unpaid penalty rates, unreasonable deductions, unpaid superannuation and withholding entitlements, as well as intentional misclassification of workers and authorised deductions applied not as agreed.
How will allegations of wage theft be investigated?
Allegations of wage theft will be investigated by the Queensland Police. An individual employer or a company may be charged with wage theft. A director or other senior officer of a company (or any other person, for example a company’s external accountant) may be liable for wage theft committed by a company if it can be shown that they were an accessory to the commission of the offence.
Who could be an accessory?
A person will be an accessory if that person, knowing the essential circumstances of the company’s wage theft, intentionally assisted or encouraged the company to commit the offence. Assistance or encouragement means doing or omitting to do any act for the purpose of enabling or aiding, aiding, counselling or procuring the company to commit wage theft. The person does not need to know that the conduct of the company is illegal to be liable as an accessory. However, the person must intentionally encourage or assist the company’s conduct, and must have actual knowledge of the essential circumstances of the company’s conduct (mere suspicion is not enough).
What if the underpayment is an honest mistake?
The Office of Industrial Relations has emphasised that wage theft is not meant to apply to unintentional conduct or honest mistakes, but is reserved for wilful or deliberate conduct. It is not entirely clear whether conduct that is reckless, but does not quite reach the threshold of being deliberate, will be captured. The amendments are based on a Parliamentary Committee recommendation that deliberate or reckless wage theft should be criminalised, and there have been some recent moves to capture reckless behaviour in other Criminal Code offences, however no express guidance has been given here. Further, an employer may have a defence under existing provisions of the Criminal Code where they have acted under an honest and reasonable but mistaken belief in the existence of the state of things, or acted in the exercise of an honest claim of right, without intention to defraud. Inevitably, the parameters of the new crime of wage theft will only be fully understood following judicial consideration.
Does the offence have retrospective effect?
The new wage theft offence commenced on 14 September 2020 and will only capture conduct from that date.
In addition to the offence of stealing, wage theft may also be captured by the pre-existing offence of fraud. The maximum penalties for both stealing and fraud by an employer have also been increased – an employer who steals from their employee is now liable for ten years imprisonment, and an employer who defrauds their employee is liable for fourteen years’ imprisonment.