New bill proposes to make wage theft a criminal offence

You wouldn’t steal a car, you wouldn’t steal a handbag, you wouldn’t steal a television, you wouldn’t steal a movie…  so why should stealing wages be any different?

The Crimes (Theft by Employer) Amendment Bill was plucked from the ballot on April 6, 2023. It proposes change to the Crimes Act 1961 to clarify that not paying an employee their wages is theft. The incentive is to provide “clear direction to employees that they have the right to be paid what they are due”.

The amendment would apply to a person (individual or entity) who employs another person and is required to pay them money owed in relation to employment. This can be under an employment agreement specifically, or as required by law. It does not matter if the employment agreement is in writing.

Importantly, the amendment only captures those who owe wages and intentionally fail to pay them. This means that if you are working to remedy a situation where wages are owed, or have made a mistake, you are unlikely to face criminal action under this amendment. However, a lack of intention does not mean alternative consequences under the Employment Relations Act 2000 will be avoided.

Current criminal offences are insufficient to cover wage theft. Theft by person in a special relationship, or theft generally, typically fall short. This amendment follows the lead from over the ditch. In response to endemic wage theft, Victoria and Queensland have implemented criminal sanctions in 2020.

In New Zealand, if the employer is an individual, the maximum penalty is 1 year imprisonment, a fine of $5,000, or both. In any other case (like a business), the maximum penalty is a fine of $30,000.

This penalty may seem like a massive leap for employers, however, in the grand scheme – the New Zealand amendment is letting offenders off relatively lightly.

Punishment for theft by person in a special relationship holds a penalty of imprisonment for up to 7 years. In Queensland, wage theft is considered stealing and carries a penalty of up to ten years imprisonment. Offenders can also be caught under Queensland fraud laws. In Victoria, wage theft carries a penalty of up to $218,088 or up to 10 years imprisonment for individuals, or a fine of up to $1,090,440 for companies.

The proposed New Zealand amendment fills a lacuna and it will be interesting to see how it plays out in an election year.

Wage theft. It’s (nearly) a crime.


Special thanks to Law Clerk Olivia Kemp for her assistance in writing this article.

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