A report to the federal government by the Migrant Workers’ Taskforce has recommended that jail time be introduced if employers underpay workers.

This would significantly increase the severity of penalties available to courts, with the Fair Work Act currently only including civil penalties for breaches. However, it should be noted that criminal sanctions would only be available in cases where exploitative conduct is clear, deliberate and systemic. It would not be imposed upon employers that inadvertently fail to comply with legal requirements. Nonetheless, such penalties should send a strong signal to employers that worker exploitation is unacceptable.

The taskforce was established in response to a number of underpayment scandals which received publicity, including those involving 7-Eleven franchisees. The report found the problem to be significantly more widespread, finding that as many as 50 per cent of migrant workers in the country may be being underpaid.

Whilst the review focused on wage issues in relation to temporary migrant workers, it was also recognised that the issue went beyond just this particular group.

The report included 22 proposed reforms, all of which have now been accepted by the federal government “in principal”. Recommendations also included a review of the Fair Work Ombudsman, improved remediation processes for underpaid workers, increasing enforcement powers available to courts and greater support and education for workers and employers.

Though the recommendations are not yet in force, the report provides numerous lessons to both employers and employees regarding what current mechanisms are in place and what should be done in this area. Employers should ensure they have appropriate practices in place for paying their workers, given the focus on addressing worker exploitation highlighted by this report.

For the full report, including recommendations in full, go to: Report of the Migrant Workers’ Taskforce, March 2019.
Further reading: Bosses who underpay their workers to face jail.