Employment Relations



Wage theft in Australia:

Certain factors influence poorly paid employees.

Wage theft and impacts.

Effect on employees.

Effect on government

Effect on the ER system..





Introduction to Wage Theft

Wage theft is the prohibited exercise of company not paying their employees the full sum for the job they have completed (Beech, 2019). It has constantly affected the communities across the country. Each year dishonest employers steal billions of dollars from employees. The occurrence of wage theft and its financial shock on employees, community, commerce, and the local economy is well recognized. While low-wage employees are cheated out of even a little proportion of their wages, it may result in main adversity like being incapable to disburse for lease, child care, and basic necessity. Wage robbery from poorly paid personnel is also harmful to civilization, as it adds to broaden wages disparity, pay stagnation, and poor living standard, interconnected issues that drive the difference in our civilization. Furthermore companies like 7 Eleven, Caltex, Pizza Hut, Dominos, Red Rooster, and others have to take accountability for their faulty trade replica which permits wage robbery and other unfair actions to grow (Lesniewski & Drucker, 2017). What is obvious from this current wage outrage is that industry size is not an assurance against the extensive break of business regulation; neither is a marketable achievement nor is being an ordinary domestic name or a product that is there on lots of high street. Also, a manager that does the correct thing and reimburse their workers the appropriate level of forfeit and entitlements must not be positioned at a aggressive drawback relative to a firm that frequently contributes to these practices. The current report will focus on critically analyzing wage theft in Australia. It will further analyze the impact of wages in the country.

Wage Theft in Australia

According to recent evidences present regulation makes wage theft too uncomplicated and the penalty very easy. Wage theft is currently so ordinary that in a few businesses it is the business replica. There are businesses possessors all over Australia becoming wealthy by pinching from their employees and the existing business regulation makes it too unproblematic (Berg & Farbenblum, 2017). As per the Industry Super Australia, a confounding one-third of qualified Australian personnel are being poorly paid super. This is 2.4 million employees together having $3.6 billion a year take from them each year (Berg & Farbenblum, 2017). Recent evidence indicated that Migrant workers are mainly susceptible as their superior has authority over both their pay cheque and their nationality status. It has been recognized that the Hospitality industry has a maximum number of wage theft outrage. Hospitality is approximately completely un-unionized and a lot of personnel are backpackers, undergraduate or young citizens. The workplace regulator, the Fair Work Ombudsman, is not capable to make a major difference. The Ombudsman’s survey has frequently exposed around half of all hospitality business is non-compliant with labor law. There are a variety of fraudulent practices.

Employers understand the probability of being caught is small as union does not have enough authority to ensure violation of business laws. Moreover, lots of employees are in a weak place to request for a decent salary. In addition, the protection of personnel from unfavorable action is fragile. There are ambiguities where the manager can evade accountability far too effortlessly. If an employee does protest about a break of agency regulation they face major expenses and threat. In spite of popular delusion, personnel cannot go to the FWC to receive their payments (Galvin, 2016). The single power that can issue a necessary order in this respect is a Court. In most superior economies strict licensing provisions and rules are leading the process of the private service agency. In some nations, the regulation builds the service agency and the end-user venture equally accountable for guaranteeing that the employee gets the amount and payback to which they are permitted. Therefore, if the service agency does not fulfill its responsibility, the employee can take actions to protect payment from the venture in which they do their job. These necessities have to assist in decreasing worker mistreatment and wage stealing. Regrettably in Australia enterprises that choose to connect a few, or all of their personnel through a private service agency, have very little compulsion to those personnel. Earlier research has recommended that this give augmentation to several very serious inadequacies in the Australian labor marketplace.

For instance:

  • The universal law does not usually see a service association among the end consumer venture that direct the job and the employee;
  • Employees engaged in this way cannot negotiate for a shared harmony with the end-user venture, or in the nonexistence of precise prerequisite, gain from a combined agreement that firms may have with its usual personnel who are performing related or even the same work responsibility (Macdonald, Bentham & Malone, 2018). Employees can close a joint agreement with the personal service agency, the group is not the organizations that direct the work and the circumstances under which the job is carried out;
  • Labor hire employees cannot make an inequitable release argument against the company, yet this venture formulate the choice as to whether the employee will have an ongoing career at the place of work or not;
  • Employees in triangular provision are less liable to protect their human rights as they understand the end-user venture can finish their service without any unfavorable penalty.

Certain Factors Influence Poorly Paid Employees

Social awareness and relational factors:

Over a quarter of underpaid members were reluctant to try to recover unpaid wages because they had agreed to the wage paid so have no complaint. Furthermore, many employees were not sure of the procedure or supposed it would be too complicated to recover the salary. Also, employees revealed that their workplace had pressurized to report them to the migration department. It is often assumed that immigrant workers are unwilling to protest to authorities or try to recover unpaid salary due to their limits including poor English language capability, lack of information of rights, and/or lack of acquaintance with Western legal culture (Beech, 2019). Migrant workers do not often have a voice in community debate and guidelines formulation relating to them. These is in part as most are in Australia for a limited period, survives and work on the suburbs of Australian civilization, are often not national English spokesman, are juvenile and, for many, are frightened of losing their work or jeopardizing their entry permits if they converse about functioning circumstances.

The present laws make pay theft trouble-free and the sentence too light. Wage stealing is now so widespread that in several places it is the trade model.

Wage Theft and Impacts

Effect on Employees

The primary effect of wage stealing on staff is the refutation of earnings. As a result, sufferers of wage thievery are not able to fulfill basic necessities of their families (Norlander, 2019). Workers and their family affected by wage stealing will find out that it is highly difficult to fulfill the price of accommodation, basic necessities, foodstuffs, and additional essentials. Wage stealing also influences the living standard of employees by making it complex for them to monetarily plan for the upcoming, which can result in delayed expenditure and inferior amount of saving. It can also guide personnel to get high-interest credit, use currency from their people. In the most difficult cases, homelessness can turn into a different threat for employees and their people as a result of wage stealing making it complex to disburse lease, give credit, and get or pay off a housing finance (Lineberry, 2017).

 Furthermore, when it comes to super stealing, mislaid a compensation in the current period lastingly deprive personnel not just of that donation but also the return on money that that payment would accrue. This also lead to an inferior value of life in the present but grounds an inferior quality of existence for personnel in retirement. The material influence of pay stealing is terrible enough, except, in addition to these, wage stealing can also have a noteworthy result on employee’s psychological wellbeing. Wage stealing repeatedly results in workers feeling worried, harassed, and helpless. Also, a lack of consciousness of support accessible can add to personnel feeling remote and unaccompanied. The influence of wage theft is so profound and significantly depressing (Lesniewski & Drucker, 2017).

Effect on Government

Wage theft mainly has two impacts on the government. The initial is that it decreases the profits that governments get from the levy, and the subsequent is that it needs amplified government expenditure. Wage thefts dispossess the Commonwealth administration of pay-as-you-go preservation; individual income duty and Medicare levy profits, though it divests the state of payroll duty. However concentrated income is not the only consequence of wage stealing on Australian administration (Carr, Goldberg & Silvia, 2017). Wage stealing also augments the requirement for administration expenses on social safety expenditure. This is because of the extremely besieged personality of the Australian society safety net, which is predicated on supplement pay. The lessening in profits caused by pay stealing thus enlarges the sum depleted on expenses including Newstart payment, Family excise advantage, or the Energy Supplement. Because of the consequence that super theft has, it is possible to augment dependence on the Age retirement fund in the future. Finally, wage thefts also augment the necessity for expend on actions to neutralize wage stealing, recuperate stolen salary, and penalize troublemaker manager. This needs augmented expenditure on enforcement through the FWO, magistrates, and the ATO (Dombrowski, Garcia & Despard, 2017). It is also essential to finance these organizations to deal with wage theft.

Effect on the ER System

Wage theft influences the reputation and goodwill of the industry. The wage theft impacts the capability to attract new clients and high-quality personnel. The issue highly influences the association between employers and employees. Business found to be violating their obligation may have to give fine as well as recompense to workers, which may grow as the press becomes even more pessimistic this is in addition to the obvious obligation that they make good any historical underpayments to workers (Thornthwaite, 2017).

Weaknesses of ER System

Reporting mechanism

Employers are stealing the wages of their employees due to which employees are reporting the issues to higher authorities. Furthermore the reporting mechanisms are not strong to deal with such violations.

Pay System (Cash in Hand)

It is highly essential to check the pay system in order to assess the issues of wage theft. Furthermore, the system helps to offer equality and stable process in screening the pay rates.

EA and Managerialism

Enterprise agreement and managerialism are the essential documents which specified the terms and conditions of employment. All the employers must adhere to the terms and conditions in order to provide fair wages to the employees.

Responses to Wage Theft


State and regional governments must alter their criminal regulations to criminalize planned, irresponsible, or disgustingly neglectful cases of pay theft. It is mainly suitable for prison punishment to be kept for the deliberate, irresponsible, or grossly neglectful case of wage stealing. Whereas all cases of wage stealing must result in several forms of the permit, a tiered structure of punishment is highly suitable, with a manager who makes an unintentional fault remaining subject to social punishment.

Pay theft must be criminalized. Therefore, researchers suggest that States must modify their appropriate criminal code to make the deliberate, irresponsible, or grossly neglectful case of wage theft an illegal offense.

The Fair Work Act 2009 is amending to augment the punishment for commit wage stealing. Moreover, interest must be compulsorily charged on stolen pay recovered. Therefore, the punishment for wage burglary must be amplified, taking the present punishment as a floor (Clemens & Strain, 2020). Whereas the FWA presently permit for interest to be considered on request, evidence believed that this must be the defaulting, just as it is for the delayed reimbursement of Superannuation agreement donations

Unions and Employees:

Australia's office associations regulations are endorse by the Commonwealth legislature. The convenient request of the Fair Work Act in workplaces is controlled by the Fair Work Commission and the Fair Work Ombudsman. The minimum pay for employees is set out in the pertinent industry honor or enterprise contract. There is also a national minimum pay for workers not enclosed by an award or a contract, and other minimum wages set for junior workers, apprentice, and learner. The Fair Work Commission is the autonomous nationwide workplace relationships court (Clibborn, 2020).

It is accountable for upholding a security net of minimum salary and service setting as well as a variety of other workplace tasks and laws. Unions require correct right of entry to workplaces suspected of underpayments to examine breach and symbolize and organize personnel to jointly implement their rights. Penalty for executive found to have intentionally or deliberately poorly paid their employees should be considerably augmented.

Conclusion on Employment Relations

It has been identified from the overall analysis that wage theft highly affects the quality of life of employees. Furthermore, wage theft becomes a common practice in Australia as there is not strict regulations and punishments. The analysis also revealed that wage theft influence the employee relations. The report also highlighted that strong rules and regulations must be developed by government in order to provide fair wages to employees. The analysis specified that an employee does not protest about a break of agency regulation because they face major expenses and threats from employers.

Reference for Employment Relations

Beech, T. (2019). Inquiry into wage theft in Western Australia: report.

Berg, L., & Farbenblum, B. (2017). Wage theft in Australia: Findings of the national temporary migrant work survey. Available at SSRN 3140071.

Carr, N., Goldberg, H., & Silvia, P. (2017). Stealing Time: The Propriety of Alleging Common Law Conversion in Modern Wage Theft Lawsuits.

Clemens, J., & Strain, M. R. (2020). Understanding “Wage Theft”: Evasion and Avoidance Responses to Minimum Wage Increases (No. w26969). National Bureau of Economic Research.

Clibborn, S. (2020). Australian industrial relations in 2019: The year wage theft went mainstream. Journal of Industrial Relations, 0022185620913889.

Dombrowski, L., Alvarado Garcia, A., & Despard, J. (2017, May). Low-wage precarious workers' sociotechnical practices working towards addressing wage theft. In Proceedings of the 2017 CHI Conference on Human Factors in Computing Systems (pp. 4585-4598).

Galvin, D. J. (2016). Deterring wage theft: Alt-labor, state politics, and the policy determinants of minimum wage compliance. Perspectives on Politics, 14(2), 324-350.

Lesniewski, J., & Drucker, J. (2017). Estimating the Impacts of Wage Theft in Illinois.

Lineberry, R. (2017). Combatting Wage Theft: Establishing Employees as Secured Creditors Under the Maryland Unpaid Wage Lien Law. Md. L. Rev., 77, 1229.

Macdonald, F., Bentham, E., & Malone, J. (2018). Wage theft, underpayment and unpaid work in marketised social care. The Economic and Labour Relations Review, 29(1), 80-96.

Norlander, P. (2019). The Growing Divergence in US Employee Relations: Individualism, Democracy, and Conflict (No. 321). GLO Discussion Paper.

Thornthwaite, L. (2017). The living wage crisis in Australian industrial relations. Labour & Industry: a journal of the social and economic relations of work, 27(4), 261-269.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Management Assignment Help

Get It Done! Today

Applicable Time Zone is AEST [Sydney, NSW] (GMT+11)
Not Specific >5000
  • 1,212,718Orders

  • 4.9/5Rating

  • 5,063Experts


  • 21 Step Quality Check
  • 2000+ Ph.D Experts
  • Live Expert Sessions
  • Dedicated App
  • Earn while you Learn with us
  • Confidentiality Agreement
  • Money Back Guarantee
  • Customer Feedback

Just Pay for your Assignment

  • Turnitin Report

  • Proofreading and Editing

    $9.00Per Page
  • Consultation with Expert

    $35.00Per Hour
  • Live Session 1-on-1

    $40.00Per 30 min.
  • Quality Check

  • Total

  • Let's Start

500 Words Free
on your assignment today

Browse across 1 Million Assignment Samples for Free

Explore MASS
Order Now

Request Callback

Tap to ChatGet instant assignment help

Get 500 Words FREE
Ask your Question
Need Assistance on your
existing assignment order?