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What's trending ? Wage trust remains a key Government and Regulator focus

With the two largest employing states in Australia pursuing wage theft punitive measures, wage trust continues to be a key government focus. - 30 August 2021

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Earlier this year, the Tax Administration Amendment (Combating Wage Theft) Bill 2021 (NSW) was introduced into Parliament, which included a number of punitive measures that are arguably broader than those introduced in commensurate wage theft legislation in other Australian jurisdictions.

Further, in its inquiry report into the Bill, the Legislative Council Portfolio Committee No 1 — Premier and Finance recommended that the Bill be amended to criminalise wage theft, or that specific wage theft legislation be passed to complement the Bill. The Bill in its current form seeks to amend the Taxation Administration Act 1996 (NSW) and introduce a number of measures to deter the underpayment of wages, including by empowering Revenue NSW to collect payroll tax which is otherwise not collected due to wage theft. Under the Bill, Revenue NSW can:

  • name employers that have underpaid wages, and therefore minimised payroll tax liability

  • disclose information to the Fair Work Ombudsman to assist in wage underpayment investigations

  • disclose information to Industrial Relations NSW to assist in investigations of long service leave breaches, and

  • reassess and recover payroll tax on wages underpaid by an employer more than 5 years after the initial assessment was made.

In its report, the Committee even recommended that the proposed measures be enhanced to empower Revenue NSW to actively identify and investigate instances of such theft.

This NSW Bill follows the recently passed Wage Theft legislation in Victoria (Wage Theft Act 2020 (Vic)) which commenced on 1 July 2021 and creates criminal penalties for employers who deliberately underpay or do not pay their employees in Victoria. It also provides record-keeping offences and establishes the Wage Inspectorate of Victoria with power to investigate and prosecute offences.

As the two largest employing states in Australia are now in the process of legislating (or have already legislated) significant wage theft punitive measures, with others in differing stages of introducing akin provisions, wage theft continues to be a key government focus.

The NSW Bill highlights the ability for governments to scale intervention through empowering revenue authorities, including potentially with proactive capabilities through the payroll tax regime. This could be an interesting blueprint for other governments/revenue authorities - for example, could the next ATO-led streamline assurance focus be on employment taxes and associated employee entitlements (proactive superannuation governance audits following the SG amnesty)? Stay tuned.

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Greg Kent

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Anne Bailey

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Adam Nicholas

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