Underpayment is not wage theft

NATIONAL

Legal and HR

Underpayment is not wage theft

We have all heard of employers occasionally paying incorrect wages to their employees. In most cases this is not deliberate, and it is not uncommon for an error to be made in making payments of wages.

Where an error has been detected the error is soon rectified. Most employers join associations that provide them with the correct wage rates and these days employers and employees have access to government bodies that provide a wealth of information about the need to ensure the correct payment of rates and penalties.

A misinterpretation of an award or agreement has led in some cases to underpayment of wages which an employee is able to claim and be paid. There errors are not deliberate or intended to defraud a person of their lawful entitlements. Even if the correct monies are paid in instalments there is never any unwillingness on the part of employers to make up for lost payments.

Unfortunately, there is now a strong suggestion amongst some governments that failure to meet wage requirements amounts to what is being called ‘wage theft’. Last year the Queensland Government called for hearings to investigate what was referred to as ‘wage theft’ and was seeking to criminalise what was referred to as stealing from employees. Currently, the Western Australian Government is considering what constitutes ‘wage theft’ and whether it amounts to a criminal offence.

The question that arises is whether non-payment of wages or underpayment of wages could be a criminal offence, and does it really amount to stealing?

Where it can be proven that a person deliberately sets out to avoid paying the correct entitlements due to an employee, such as knowingly paying a lesser amount and expecting the employee to work long hours may constitute an offence that is theft. There are undoubtedly some naïve and vulnerable employees who are taken advantage of by unscrupulous employers but that doesn’t necessarily apply to all employers.

Separating the non-payment of a penalty rate payable in an award by an otherwise compliant employer could not, and should not, be categorised as a deliberate and wilful action. Awards are not the easiest instruments to follow and there is no doubt that an underpayment could easily happen in some circumstances, and this would, in most cases, hardly amount to theft.

Perhaps we need to accept that there will always be those who will deliberately set out to avoid making the correct payments to their employees. Those who engage in these practices should be forced to pay a price for such behaviour.

However, care needs to be taken to distinguish between errors being made in what is becoming a complicated award system and making a mistake in the calculation of a wage rate, or a penalty rate, can hardly fall into the category of a criminal offence mainly because there is no real intent to deprive the employee of a right.

Perhaps we should reflect on whether our wages system has become too complicated and that we don’t really operate under truly modern awards at all?

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