There will be a new agency, the Victorian Wage Inspectorate, which has already been funded with $22 million in the 2018 budget, to enforce the new regime. The courts will have power to force employers convicted of wage theft to compensate their victims, with offenders then obliged to prove they have paid their debts to their employees. “Every worker has the right to get a fair day’s pay for a fair day’s work,” the Premier told The Age . “The simple fact is underpaying workers is theft and it’s time it’s treated like that in our laws.” Underpayment of workers is the responsibility of the Commonwealth, with the law enforced by the Fair Work Ombudsman, which takes offenders to the civil courts and can mount criminal prosecutions only in limited circumstances.

Nearly half of the restaurant, catering, cafe and fast-food businesses surveyed had at least one wage contravention, according to reports by the Fair Work Ombudsman. Wage underpayment has been revealed to be endemic with a series of scandals exposed by The Age involving some of Australia’s biggest businesses. Last weekend, The Sunday Age revealed migrant farm workers near Shepparton were being paid as little as $8 an hour. The former South Australian Labor government took a tough policy on underpayment to its election defeat in March, while the NSW Labor opposition is moving in a similar direction, but no state has yet legislated to criminalise wage theft.

Saturday's announcement follows a strong push from the Victorian Trades Hall Council and its Young Workers Centre, revealed last month by The Sunday Age, for criminal penalties for employers who rip off their staff. Trades Hall Council secretary Luke Hilakari said the move was "long overdue". Mr Hilakari said the proposal was an "Australian first" and a "collective win for everyone who cared about workers' wages being stolen". He said federal workplace laws and the Fair Work Ombudsman had failed to deal with the problem. The Ombudsman received more than 14,000 allegations relating to underpayment in a single year but launched only 42 litigations on the issue, Mr Hilakari said.

Federal Labor has reservations about criminalising wage underpayment, saying in the "normal course of events" industrial relations should be in the civil courts. There could also be concerns about the Victorian Wage Inspectorate duplicating the role of the Fair Work Ombudsman. Business groups strongly oppose the push to make wage underpayment a crime. Australian Industry Group chief executive Innes Willox said there was no need for new state laws because Federal laws already addressed the issue. “The Fair Work Act already contains very large penalties for employers who underpay workers and those who do not keep the required pay records," he said. "These penalties were recently increased by up to 20 times.

“Underpaying workers is not acceptable behaviour. However, 'wage theft' is an emotive term coined by the union movement designed to tarnish all employers. It describes something which is already effectively and comprehensively addressed in legislation." James Lea says he has been underpaid in hospitality jobs. Credit:Lucie McGough James Lea, 24, from Melbourne will address the Victorian Labor Party Conference on Saturday after being underpaid in four out of five hospitality jobs he has had in the past four years. He was paid nothing at all for a work trial at one cafe. He said he was excited Premier Daniel Andrews had acted to criminalise wage theft. "I think there's been overwhelming support for the campaign to criminalise wage theft," he said.

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