On 6 April 2023, the Crimes (Theft by Employer) Amendment Bill 2023 (the Bill) was produced from the ballot in Parliament. This new Bill is proposing to criminalise employers who intentionally fail to make payment of employee entitlements.
If successfully passed, the Bill would amend the Crimes Act 1961 (the Act) to state that not paying employees their wages is theft and will impose a new offence on employers who owe wages and intentionally do not pay them to their employees. This includes the unlawful withholding of wages, salaries, and other monetary entitlements within an employment relationship. The Bill would provide clear direction to employees that they have a right to be paid what they are due, and such a right is set out in law. Similar laws have recently been in Victoria and Queensland states since 2020.
Under the current Act, "theft by a person in a special relationship" is considered a crime. However, the scope of the current section would need to be broadened to cover instances of wage theft by an employer. The current processes for employees in this situation are long and complex and often act as a deterrent for victims of wage theft.
Similar behaviour from an employer is already captured under several employment-related statutes (such as the Holidays Act 2003, Wages Protections Act 1983 and Minimum Wage Act 1983); however, it is hoped the Bill will solidify these employee rights.
It is important to note that if, as an employer, you are actively working on fixing a situation where an employee is owed wages or a mistake has been made concerning the payment of wages, it will be unlikely that you may be liable for criminal action. You may still face consequences under the Employment Relations Act 2000.
If convicted, an individual could be liable for a maximum penalty of one year's imprisonment, a fine of $5,000.00, or both. For a legal entity, the maximum penalty is a fine of $30,000.00.
There has been increased advocacy for enforcement of minimum employment entitlement recently – particularly relating to employees from immigrant, student, and low-income classes. It's expected there will be wide-ranging support for the Bill, particularly from various union groups.
We will keep you updated on the progression of the Bill as it moves through the House.
If you have any questions regarding the Bill and how it may impact you as an employer or employee, please do not hesitate to contact Solicitor Tyla Robinson tyla@iclaw.com or Associate Olivia Day olivia@iclaw.com or 07 929 4300 to make an appointment.