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Labor announce harsh penalties for dodgy bosses

February 2, 2016


Federal Opposition leader Bill Shorten yesterday announced a suite of measures aimed at protecting Australian workers from being underpaid.

Under a Shorten Labor Government, employers who deliberately underpay their workers would face increased penalties and even the possibility of up to two years imprisonment.

Citing a number of recent examples of “brazen and systematic” underpayments, Labor’s plan would see fines for employers who deliberately underpay staff increase from $10,800 now to three times the amount of the underpayment, or $216,000 for an individual and about $1.08 million for a corporation, whichever is greater. A new criminal offence would also be introduced for those employers who intentionally or recklessly underpay their workers.

2015 has seen a number of large Australian employers face immense public scrutiny as a result of substandard employment conditions with approximately $22million in back pay recovered by the Fair Work Ombudsman in 2014-15 for more than 11,000 workers across Australia.

In addition Mr Shorten announced a raft of other changes including a shake-up of the sham contracting provisions relating to independent contractors and increased protection for migrant workers. These changes align with Labor’s claim that it will stand up for working and middle class families.

Are you responsible for an inadvertent underpayment?

While the measures announced today focus on wilful and deliberate behaviour, Australia’s workplace regulation is complex and it is not uncommon for employers to inadvertently underpay employees from time to time.

Under the Fair Work Act 2009, any employer who is responsible for an underpayment may be required to back pay an employee for up to 6 years and significant penalties can be applied against a Company or individuals involved in any such underpayment.

Whether or not this proposed legislation eventuates, it is clear that the increased scrutiny upon employment relations compliance will only increase in 2016 meaning that all employers need to take immediate steps to ensure that their business is compliant in all areas to avoid your business becoming the next headline.

For more information on underpayments and what this means for you, clients should contact the HR Assured team. If you’d like more information about the benefits of becoming an HR Assured client contact us today for an informal chat.