Wage theft has become so brazen and so widespread, Australia’s coalition government, traditionally businesses great political ally, has started making moves towards introducing laws that would make the underpayment of wages a crime.
Provocative or not, it wouldn't exactly be an overstatement to describe wage theft as an operation that bears remarkable features of a "systemic money heist" carried out by employers on employees.
The incidence of wage theft is one that has always needed dire intervention by the government due to the inevitable existence of unscrupulous employers wanting to take undue advantage of loopholes in legislation, extant corporate practices, and general workplace culture to rob employees of their hard-earned wages. It transcends the mere underpayment of staff or employees. Wage theft assumes the form of less obvious deductions like unpaid superannuation, sham contracting, and improperly classifying employees as independent contractors to circumvent appropriate remuneration.
Employers know that the chances of getting away with wage theft are high because of the insufficient powers of the workers' unions to check such breaches of workplace laws. Many workers are on a weak position at the negotiation table as many of them are under unfavorable contractual positions (casual workers, sham contracts, temporary visa workers). Understandably, the Morrison-led government noted a sense of outrage that is fast gaining momentum amongst the citizenry. In a bid to arrest this situation before it, it became more or less a business model for small scale businesses and large corporations alike, the Attorney general's department meted out two discussion papers on measures, applicable sanctions and penalties to combat wage theft. The first paper bothers on criminalising classification of employees as independent contractors to rob them of accruable pay, a common practice among employers. In contrast, the second paper opens the floodgates of a lift on the 4-year cap on wage deals for new work sites.
It is crucial to underscore that the narrative surrounding the normalisation and perpetuation of an underpayment is two-sided—between the employer and employee. One of the major worries of employers on this subject matter is that overpayments and underpayments in most cases are down to an imprecise and complex wage-paying calculus. Jennifer Hewett, a columnist at Australian Financial Reviews, captured the contextual background to this subject matter thus:
"Australia's peculiar national skill has been to maintain and build on its arcane labyrinth of award classifications, minimum rates, overtime, and penalty conditions. It's enough to confuse the sharpest mathematician, let alone a small business owner or even a corporate HR department. Investment in payroll systems and technology – and the human brain - can't always keep up. Underpayment in corporate Australia is more often inadvertent than deliberate, inadequate attention detail rather than overly greedy about profit.
The reality of these intricacies to a great extent, legitimises the employers' concern about the incidence of overpayments being sidelined from the discourse. There have been suggestions that to avoid a situation where employers be damned if they underpay (allegations of wage theft) and also damned if they overpay (per loss of revenue), the best approach in such an instance would be to deduct the amount underpaid from the amount overpaid to the said employee. The net-income for the employee should then be examined afterwards, and if the employee is better off, no prosecution should ensue. Thus, overpayments should offset underpayments.
Bearing this in mind as an employer seeking to avoid underpayment of employees, it is advisable to hire an external auditor. But most often, the opinion of employment lawyers is needed to decide whether or not to engage the services of an external auditor. Employment Lawyers possess the skill to interpret employment contracts to advise employers on whether they have the right to withhold a particular sum deemed accruable by an employee. Also, employment lawyers come in handy because it often helps in court when employers are able to prove to the Fair Work Ombudsman or the Courts that they acted based on legal advice rather than on their own accord.
Rather curiously, while it remains to be seen if the name-and-shame methodology is one that the Australian government will employ in achieving its aims of phasing out the underpayment of employees, the name-and-shame policy is one approach the government has to take a careful consideration of, to avoid cases where mere mistakes or minor misgivings and indiscretions becomes labelled as an act of malfeasance, the perpetrator of which gets slapped with a damage to their reputation.
In a bid to come to a resolution on a new wage theft regime that will terminate the incidence of deliberate wage theft, major stakeholders concerned may disagree to agree, agree to disagree or may not even agree at all on the relevant issues for deliberation. But for all parties involved, two thing stands aloof with crystal clarity:
First—the common enemy here is deliberate wage theft;
Second—the jig is up for unscrupulous and exploitative employers; it is about time they gave unto Caesar what is Caesar's.
