Bosses who deliberately underpay workers could face up to four years’ jail and $1.1 million in fines under a new criminal offence of wage theft.
The new offence will carry a maximum penalty of $5.5 million for companies but doesn’t cover one-off underpayments, inadvertent mistakes or miscalculations.
It will apply to national system employers that deliberately underpay one or more workers, with people convicted of wage theft disqualified from managing companies for five years.
Industrial Relations Minister Christian Porter said the vast majority of businesses do the right thing with most underpayments not deliberate.
“But there is a small minority of unscrupulous operators who deliberately and systemically seek to underpay their staff,” he said.
“Those that deliberately do the wrong thing will now face a new criminal penalty that could see them jailed for up to four years.”
The changes form part of the Morrison government’s industrial relations omnibus legislation which will include increased funding for the Fair Work Ombudsman.
More than $47 million will be provided for education for business to help them comply with the law.
Almost $13 million will be handed to the FWO to set up a new advice service for small business to meet obligations like award classification and pay.
Employers that can prove they followed the guidance of the advisory service will be exempt from prosecution if the advice is found to be incorrect.
A further $22.3 million will be spent on boosting the ombudsman’s investigative capacity.
The FWO and the Australian Building and Construction Commission will formalise and publish existing deferred litigation process for minor inadvertent underpayments that are quickly rectified.
The cap on small underpayment claims that can be pursued through courts will be lifted from $20,000 to $50,000.
The Fair Work Commission will be made available to the courts to deal with small claims matters through alternative dispute resolution processes.
The commission will have arbitration powers if conciliation is unsuccessful.
Mr Porter flagged award simplification would be also included in the bill, which he says is focused on increasing job growth during the coronavirus recovery.
Labor and unions have signalled a looming battle on the legislation after raising serious concerns with the section about casual employment.
Opposition industrial relations spokesman Tony Burke said the plan to allow casuals more rights to convert to permanent would tip the balance in employers’ favour.
“An employer will be allowed to abuse the rights of casuals for a full 12 months before they even have the right to ask ‘can you please stop doing that?'” he told reporters in Canberra.