A new wage theft law in Australia, effective January 1, 2025, criminalizes the deliberate underpayment of workers, imposing penalties of up to 10 years in prison and fines of $1.65 million for offenders.

Under the new legislation, companies found guilty of wage theft could face fines exceeding $8 million, or three times the amount of the underpayment.

Workplace Relations Minister Murray Watt emphasized that the law is grounded in fairness, equating employee theft from employers to employer theft from workers.

Watt reassured that the laws will not penalize honest mistakes, focusing solely on employers who intentionally underpay their workers.

Joseph Mitchell from the Australian Council of Trade Unions hailed the new laws as a significant victory for workers, aimed at addressing systemic underpayment issues.

A recent survey indicated that 22% of businesses are currently addressing payroll issues, highlighting widespread concern within the business community.

Andrew McKellar, head of the Australian Chamber of Commerce and Industry, expressed concerns that the new laws would complicate the industrial relations framework and burden businesses, particularly small ones.

Business lobby groups, including the Australian Chamber of Commerce and Industry, have criticized the legislation as burdensome for fair business owners, arguing that the complexities of the Fair Work Act complicate compliance.

The hospitality industry has faced scrutiny, with high-profile establishments linked to underpayment scandals, including those owned by celebrity chefs.

In a notable case, 7-Eleven repaid $173 million to over 4,000 workers for wage theft in 2020, underscoring the prevalence of this issue.

Estimates suggest that Australians lose between $850 million to $1.55 billion annually due to wage theft, with the McKell Institute estimating losses at nearly $850 million.

The introduction of these laws is expected to be a significant point in the major parties' campaigns ahead of the federal election in early 2024.