Massive penalties in store for exploiting vulnerable workers

By Jeff Salton on September 7th, 2017

The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 passed through Parliament this week (5 September) heralding a raft of changes that include increasing the maximum penalties for employers who deliberately flaunt the minimum wage and other entitlements under the Fair Work Act 2009.

The Fair Work Ombudsman Natalie James has welcomed the passing of the new laws that will significantly enhance her office’s capacity to take action in cases of exploitation of vulnerable workers.

Under the laws, financial penalties for ‘serious contraventions’ will increase to 10 times higher than the current maximum penalties where an employer knew they were breaching their obligations and this conduct is part of a systematic pattern of behaviour.

In such cases maximum penalties of $630,000 and $126,000 per contravention could apply to corporations and individuals respectively.

The new laws will double the maximum penalties for record-keeping and payslip breaches, to $12,600 per contravention for individuals and $63,000 for companies, and triple existing penalties in cases where employers give false or misleading payslips to workers, or provide the Fair Work Ombudsman (FWO) with false information or documents.

Last financial year two-thirds of the FWO’s court cases involved alleged record-keeping or payslip contraventions and nearly one-third involved allegations of providing false or misleading records.

What employers can expect from the amended Bill

Some of the key changes include:

  • increasing to 10 times the current maximum penalties for employers who knowingly contravene the laws and it is part of a systematic pattern of contravening conduct;
  • triple the maximum penalty for false or misleading employment records;
  • double the maximum penalties for record-keeping and payslip breaches;
  • certain franchisors and holding companies now become responsible for underpayments by their franchisees or subsidiaries where they knew, or reasonably ought to have known, about the contraventions and failed to take reasonable steps to prevent them;
  • employers who do not meet record-keeping or payslip obligations and cannot show a reasonable excuse, will need to disprove wage claims in court;
  • new penalties for providing Fair Work inspectors with false or misleading information or records, and new prohibitions for hindering or obstructing them;
  • the prohibitions against unreasonably requiring employees to make payments, commonly known as ‘cashback’ arrangements, have been strengthened and extended to prospective employees;
  • the FWO’s evidence-gathering powers have been strengthened.

Ms James said that these increased powers will be deployed as a last resort.

“My agency will continue to be fair and balanced in its approach and will to operate in accordance with our compliance and enforcement policy.

“However, employers who know their obligations and systematically fail to meet their workplace obligations should be on notice that we will use all the powers at our disposal,” Ms James said.

The new laws will apply from the day after the Bill receives royal assent, except for the new franchisor and holding company liability, which will start six weeks later.


Now, more than ever, you need to know what your employees’ wages and entitlements are and be able to double-check that you are doing the right thing by the FWO.

One of the best and easiest ways to check is by purchasing The Wages Guide.

Written by employment law expect Charles Power, The Wages Guide provides a snapshot of current wages legislation in Australia and is a useful guide for anyone in business who needs to pay wages.

This 24-page eBook will help ensure your employees are being paid fairly and that you are not breaching any workplace laws.

The Wages Guide also contains four legally compliant document templates that you can download, edit and use in your workplace with confidence, including:

  • Award Flexibility Agreement template
  • Annualised salary calculator
  • Weekly timesheet template
  • Payslip template

You can get your copy today by clicking here.

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