This month, the Crimes (Theft by Employer) Amendment Bill passed into law.
For the background of the Amendment Act, please see our article from September 2024.
While it is acknowledged that the vast majority of employers compliantly pay employees their wages, the purpose of the Amendment Act is to define that the intentional failure to pay wages owing to employees is theft, and to hold employers to account by the possibility of criminal sanctions.
Before the Amendment Act was passed, the only avenue for recovering lost wages and statutory entitlements was a claim for wage arrears either brought directly by an employee, or by a Labour Inspector.
The Amendment Act clarifies that an employer will be liable for wage theft where they are required to pay money to an employee, and:
- Intentionally fail to do so; and
- Do not have a reasonable excuse for the failure to pay.
Given these requirements, if the failure to pay wages is unintentional, an employer may have a defense if they are able to demonstrate this.
If an employer is found guilty of wage theft, the following penalties will apply:
- For individuals, a fine of $5,000, up to one year’s imprisonment, or both;
- In any other case, a maximum fine of $30,000.
While the Amendment Act does not impose any additional obligations on employers, it does create a risk that employers may face criminal prosecution for the failure to pay wages.
If you have any questions or concerns about this legislative change, or wish to review your current processes and employment documentation – including employment agreements and policies – our employment team would be happy to talk with you.
