Gaurav Setia, a Victorian restaurant owner now faces up to 10 years in prison and more than $1 million in corporate fines, after being criminally accused of allegedly neglecting to pay personnel properly. This is the first instance of wage theft being treated as a crime in Australia.
The Macedon Lounge and its owner Gaurav Setia were charged with 94 criminal counts by the Wage Inspectorate Victoria on Friday for allegedly failing to pay more than $7000 owed to four employees over a five-month period.
New regulations passed by the Victorian government in 2020 went into effect in June 2021 and made wage theft a crime punishable by 10 years in jail for the company owner and $1.1 million for the corporation if underpayments were determined to be intentional.
Individuals who commit these offences may be fined up to $218,088 or sentenced to up to 10 years in prison; businesses that commit these crimes may be fined up to $1,090,440.
The rules against wage theft in Victoria target companies that intentionally and dishonestly withhold pay and other benefits due to employees. Wage theft does not include honest mistakes made by employers that take reasonable care to pay salaries and entitlements.
The watchdog claims that between July and November of last year, Macedon Lounge and an “officer” (an employee who has control over the company) violated these regulations by dishonestly underpaying staff rights, which include salary, superannuation, and penalty rates. According to corporate documents, Setia is the only officer of the corporation.
This is the first time wage theft has been criminally prosecuted in the nation and the first time criminal charges have been brought under the new Victorian laws. Although it is illegal to steal wages in Queensland, no restaurant or business owner has ever faced legal action.
Robert Hortle, the commissioner of the Wage Inspectorate Victoria, stated that his team investigates complaints, speaks with witnesses, and uses coercive force before determining whether to file charges. He added that his staff takes every case of wage theft seriously.
In a statement, Hortle stated, “Victorians can be confident the Wage Inspectorate is doggedly investigating wage theft reports and intends to bring further appropriate matters before the court”.
“These are the only stand-alone, criminal wage theft laws in Australia. There are serious penalties for dishonestly withholding employee entitlements in Victoria,” he added.
In order to execute state laws pertaining to wage theft, child employment, long service leave, and independent contractors, an independent statutory body was established in June of last year.
Since then, it has imposed a $50,000 punishment on Coles for failing to fulfil the long service leave benefits of thousands of employees, and last year, it sued National Australia Bank. It has a wide range of powers, including the ability to apply for and carry out search warrants as well as the right to enter properties in order to gather information and seize evidence.
Luke Hilakari, secretary of the Victorian Trades Hall Council, who advocated for stricter regulations to stop wage theft, claimed that the deliberate underpayment of employees has turned into a business model in the state.
The last thing you need is the employer stealing money to expand their business when prices are rising. If this is being done on purpose, the court needs to punish them severely, according to Hilakari.
The case, which Hilakari said would be the first of many when new regulations are enforced, should be noted by all business owners, he said. As businesses operated beyond state lines, he demanded the creation of a federal framework to pursue wage theft.
Hilakari noted, “It would be great one day if there was national consistency”.
According to its Facebook profile, The Macedon Lounge began operations in the first year of the COVID-19 pandemic but recently had to close owing to a lack of staff. According to Hilakari, many significant corporations and well-known business owners would face criminal charges if the legislation were retrospective.