Employers could face jail time under new laws

The Attorney-General is drafting laws to deal with criminalising worker exploitation

Employers could face jail time under new laws

Employers who exploit workers may soon face criminal penalties including jail time, according to the Prime Minister Scott Morrison.

"Right now, the Attorney-General (Christian Porter) is drafting laws to deal with criminalising worker exploitation," said Morrison during parliamentary question time.

Porter added that criminal sanctions would send "a strong and unambiguous message to those employers who think they can get away with the exploitation of vulnerable employees".

This week, celebrity chefs George Calombaris and Neil Perry have been dealing with the fallout of underpayment scandals, and Employsure is advising employers to be vigilant around how they pay their staff.

In the past few days, Calombaris has been hit with a $7.8m underpayment bill, while Perry is facing legal action for the alleged underpayment of a chef.

Senior employment relations adviser at Employsure, Michael Wilkinson said wage underpayment is an undeniable problem across the country, but an investigation into the causes is needed rather than heaping more regulation, compliance, and punishment onto employers.

“It doesn’t make sense — why create fear in the business community?” he asked.

“Before we label an entire section of Australia’s economy as bosses intent on ripping off their staff, can we perhaps examine a deeper reason why employers might be struggling to pay their staff correctly?

READ MORE: ‘This is a clear case of migrant exploitation’

"While systematic underpayment is a serious matter, it's honest errors and a lack of understanding of entitlements that puts smaller hospitality businesses at risk.”

He added that the FWO will not see ignorance as an excuse, as they will pursue cases of underpayment in an attempt to reclaim any unpaid wages.

"It's no secret that we have one of the most complex workplace relations systems in the world, and hospitality employers are especially prone to making wage errors," he said.

"Between casuals, part-time and full-time workers, along with rising minimum wages, various penalty rates and Award entitlements, it's a merry-go-round and they can find it hard to navigate.”

Wilkinson added that 30% percent of calls from their clients in this sector will relate to basic employee entitlements, “so it’s clearly an area where they struggle”.

READ MORE: Employers sentenced over exploitation

The FWO will be targeting fast-food, restaurants and cafes as part of its compliance and enforcement action over the coming 12 months.

“This is certainly a cautionary tale for all employers in the sector,” said Wilkonson.

"It's incredibly easy for employees to tip-off and report cases of underpayment.

“With the attention being placed on the sector, it's a wake-up call for employers to be confident that they are compliant with the entitlements of their staff."

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