A Sydney insolvency lawyer has called for a considered stance and open-minded policy discussion on criminalising errors in remuneration, particularly for small to medium enterprises (SMEs) that are more hard pressed financially than bigger firms.
Ben Sewell, principal at specialist law firm and consultancy Sewell & Kettle, is concerned that this debate is demonising well-meaning employers and may disadvantage employees in the long run.
“What might look like wage theft might actually be a lack of awareness that payroll systems needed to be updated in line with a law change. For SMEs we need to focus on prevention and support. Punishment should always be a last resort,” he said.
Mr Sewell adds that government would do well to increase funding to government agencies to support businesses when regulations change to ensure that they are up to date.
He points out that the term ‘wage theft’ is used when employers underpay employees knowingly or mistakenly, making the term problematic.
Criminal laws against wage theft delayed
The federal government announced in July that it would bring in new criminal laws against such conduct but has delayed the changes and is consulting on measures to criminalise wage theft.
At the same time federal attorney-general Christian Porter emphasises that only deliberate behaviour from employers will attract the new criminal penalties.
Mr Sewell enquires as to whether it’s appropriate that government runs a consultation titled ‘wage theft criminalisation’ when it should be a wide-ranging and open-minded policy discussion.
“Looking at the changes themselves, this new direction on underpayment will penalise those employers that are already stretched or in financial troubles.”
Proper response to wage theft
On the subject of a proper response aimed at stopping actual wage theft, Mr Sewell says that creating new penalties is a government cop-out instead of solving the problem, which includes increased funding to government agencies to support businesses when regulations change to ensure that they are up to date.
If employers are wondering what to do in the meantime, Sewell advises doing research to gain a knowledge base.
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