Jail time for wage theft highlights need for strong corporate governance

The government has announced it will move to criminalise wage theft in Australia, after several underpayment scandals have made national headlines in the past few years.

In a parliamentary session in late July, Prime Minister Scott Morrison confirmed that Attorney-General and Industrial Relations Minister Chris Porter is drafting legislation that will introduce jail time for wage theft, among other penalties for various forms of worker exploitation.

This proposal comes after a number of wage theft scandals over the past two years. In one of the most recent cases, celebrity chef and judge on Network 10’s popular MasterChef program, George Calombaris, was fined after his company was found to have underpaid employees nearly $8 million.

Mr Calombaris was forced to pay $200,000 in ‘contrition payments’, which Minister Chris Porter publicly described as “light”. The MasterChef judge said he was unaware of the underpayment, and he had made a “terrible mistake”.

The proposed new penalties will increase the need for EAs and their executives to ensure employees are being paid correctly.

“People have a legal right to be properly paid. And that a number of businesses think this is just ‘oh yeah just fix it up after or just pay the fine, not a problem,’ or that the government thinks these are not the real issues where you need industrial relations reform is something that is shocking,” Mr Porter said.