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Are You Familiar with the Recent Changes in Employment Laws?

On 7 December 2023, Parliament passed the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 (Bill), splitting the government’s omnibus industrial relations bill into two. The Bill received Royal Assent on 14 December 2023. Outlined below are 3 key changes.

1. Criminalising intentional wage underpayments

From 1 January 2025, intentional underpayments of wages by employers will be a criminal offence.

Where an Employer intentionally underpays or owes money to an employee, if proven, may serve jail time or be heavily fined or both for their crime.

2 common examples of intentional underpayments under the Fair Work Act include:

  • Not paying the minimum rates of pay as per the National Minimum Wage, a Modern Award or other industrial instrument such as an enterprise agreement.

  • Failure to pay employee entitlements stipulate in a Modern Award, enterprise agreement or the NES.

Additionally, failure to make the required superannuation contributions will also come under this new law.

Companies prosecuted face penalties three-times the amount of the underpayment, if a court can determine it, or $7.825 million, whichever is greater. If the court can’t determine the underpayment, the maximum penalty is $7.825 million.

Individuals can be imprisoned for up to 10 years; be fined either three-times the amount of the underpayment, if the court can determine it, or up to $1.565 million, whichever is greater; or be both fined and imprisoned.

Misinterpretation of an industrial instrument or where a genuine mistake has been made, these laws will not apply.

A Voluntary Small Business Wage Compliance Code will be established before the changes take effect, and compliance with this Code means a small business won’t be prosecuted if they underpay their employees.

The Fair Work Ombudsman will, once the offence takes effect in 2025, investigate suspected criminal underpayment offences.

2. Equal pay for labour hire workers

From 15 December 2023, employees, unions and host employers can apply to the Fair Work Commission for a regulated labour hire arrangement order.

The Bill will give power to the Fair Work Commission (FWC) to make orders requiring employers with enterprise agreements to pay labour hire workers at least the same as the direct workforce if they perform the same duties or if the employer’s enterprise agreement would apply to the labour hire worker if they were employed directly.

The changes only apply to the employee’s entitlement to pay; they do not apply to non-monetary entitlements owed under a host employers industrial instrument.

The changes also do not apply:

  1. to small business owners;

  2. for certain short-term or other fixed periods;

  3. where an employee is paid more under their employment contract, or an industrial instrument that applies to them; or

  4. to training arrangements administered under State or Territory vocational training schemes.    

3. New discrimination protections

From 15 December 2023, employers cannot discriminate by taking adverse action against employees because they have been subjected to family and domestic violence.

Awards and enterprise agreements must also not include terms that discriminate against an employee because they're experiencing (or have experienced) family and domestic violence.

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