Business owners who deliberately underpay their staff could face jail time under a NSW Labor proposal targeting wage theft.
Speaking at the NSW ALP’s annual conference in Sydney on Sunday, NSW Opposition Leader Mr Foley said a Labor government would introduce state laws to crackdown on businesses – including head franchisors – that were found to have underpaid staff or paid them less than the legal minimum wage.
The proposal comes in the wake of a Fairfax Media investigation revealing widespread underpayment of staff, predominantly young university students, in Wollongong hospitality and retail businesses.
At the head of Labor’s five-point plan is a proposal to create a criminal charge for deliberately failing to pay proper wages and entitlements, which would carry a fine and a prison sentence.
Mr Foley confirmed employees deemed to have made a “genuine mistake” would not be penalised, with the law instead aimed at those “flagrant abusing” their workers’ rights.
The plan also includes a set of laws making franchisors responsible for the actions of their franchisees.
Mr Foley said current penalities were not tough enough and federal and state orgnisations did not have the resources to conduct proactive audit of businesses.
He said new state laws would be created to plug legislative holes not covered by Commonwealth legislation.
“When there is systematic exploitation of workers in the workplace, government has a responsibility to intervene,” Mr Foley said.
“Entire chains are built on paying black market wages and the penalties are so low they think that exploiting workers is worth the risk; being caught is just the cost of doing business.”
Wollongong MP Paul Scully welcomed the move, saying the package would help to protect the wages and conditions of young workers.
“Labor’s plan will not apply to genuine mistakes but it will introduce a tough set of laws that will attract heavy fines and jail terms for unscrupulous employers who routinely exploit their workers,” he said.
Liberal Kiama MP Gareth Ward said he was happy to look at any proposal that strengthened protections for workers that aren’t paid what they’re owed however noted employment law was primarily a federal issue, with disputes dealt with by Fair Work Australia.