Risk of jail time and million-dollar fines will be enough to scare off Australia’s employers from not paying their workers, Workplace Minister Tony Burke has said.
New legislation set to be introduced into parliament next week will include tougher penalties for employers guilty of wage theft, including a maximum 10 year prison sentence.
Speaking on Sunday, Mr Burke said bosses will face wage theft fines up to $7.8 million or up to three times the amount that was underpaid, if that amount exceeds the maximum fine.
“I'm surprised it’s even been controversial. The objective here is not to send people to jail. The objective is to make sure that people are paid properly,” the minister told ABC’s Insiders
“So there’s a combination of the changes we’re making with the prison terms being there, which I do think will sharpen the minds of the very few people who’ve engaged in this intention.”
Last year, the workplace watchdog recovered a record $532m in unpaid wages and entitlements for more than 384,000 workers across Australia.
A recent analysis by the Mckell Institute estimated workers in the country were being underpaid nearly $850m per year, costing the economy more than $330m.
Mr Burke’s new workplace reforms will also give union delegates greater powers in workplaces to access payroll data without notice if underpayment has been suspected.
This has triggered backlash from business and employer groups, who are concerned it would give unions access to personal documents.
“Sometimes in underpayment cases, all the records are impactful because, for example, people are clocking off and being told if you're propped up and got to come back and keep working,” Mr Burke said.
“The only way you get to uncover and establish that that is in fact happening is if you arrive without the notice.”
Opposition Leader Peter Dutton lashed out over Mr Burke’s proposals and said it would raise living costs and negatively affect small business owners.
He told Sky News he would not consider supporting the legislation if did not reduce flexibility for workers and employers and “make it harder for a small business to keep its doors open at a time when the government is making it harder for that business to be successful.”
“What we've seen so far, it would be very, very difficult for us to support what will be an economy-destroying piece of legislation and just another nail in the coffin of small business,” Mr Dutton said on Sunday.
The Closing Loopholes Bill will be tabled in parliament by Mr Burke next week.