Workplace relations minister Tony Burke has said sending employers to jail for wage theft is a loophole that needs to close, adding he is surprised it has been controversial.
The minister also has hit back again at industry critics warning the laws promising to improve conditions for gig workers will make services more expensive.
The Albanese government will introduce a bill on Monday to grant the Fair Work Commission (FWC) the power to set minimum standards for hundreds of thousands of “employee-like workers” on digital platforms from 1 July 2024.
The bill, which Labor says is aimed at “closing loopholes”, will also make it a criminal offence to deliberately underpay workers, with jail terms of up to 10 years and maximum fines of up to $7.8m – or three times the amount that was underpaid if that amount exceeds the maximum fine.
Businesses with 15 or fewer employees will be exempt from the rules.
Burke told ABC’s Insiders on Sunday the changes were to make sure workers were being paid properly.
“If you intentionally, as a worker take money from the till, it’s a criminal offence and it should be,” he said.
“But if the employer intentionally withholds money from your pay, it’s not a criminal offence. Now that is a simple loophole that should be logically simple to close. I’m surprised it has even been controversial.
“The objective here is not to send people to jail. The objective is to make sure that people are paid properly.”
Under the new powers, the FWC will be able to initiate investigations into allegations of deliberate underpayment and have the discretion not to pursue criminal proceedings if the business cooperates.
Burke said the commission would also consider minimum standards for gig economy workers, including for pay, penalty rates, superannuation, payment terms, record-keeping, insurance and deactivation.
He said the commission’s considerations could also include portable leave entitlements but that would be a “long way” off.
“It can’t be anything that interferes with the nature of the engagement so that is why overtime wouldn’t work, that is why rostering wouldn’t work,” Burke said on Sunday.
Asked how much the changes would raise the pay rates for workers, such as delivery drivers, Burke said it was a “very modest” amount.
“If you do the maths on the difference being something in the order of $3 to $4 an hour, you know that people do between four and six deliveries in an hour, usually, you can do the maths pretty quickly,” he said.
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“It makes a huge difference to them but it is a very modest difference to someone – it’s a smaller difference than whether you add anchovies to your pizza.”
Industry groups, including the Business Council of Australia and Australian Chamber of Commerce and Industry (ACCI), have also been critical of the proposal, describing it as radical and warning it will make services more expensive and less accessible.
Burke conceded some people will pay more but the impact will be “really minor”.
“There are some people who have to pay more,” he said. “But the reason it is a minor impact is all we’re talking about is closing loopholes where we already have a standard,” he said.
“We have a standard for what people should be paid – wage theft is when that is being undercut.”
ACCI chief executive, Andrew McKellar, on Thursday said it was consumers who were going to be hit hard by the changes.
“The minister made it very clear that costs will be going up,” he said. “The cost of your takeaway pizza on a Friday night will become more expensive, the cost in terms of getting a ride home.”
The ACTU president, Michele O’Neil, accused employers of “crying wolf” and a “scare campaign”.
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