Victorian Wage Protection Legislation Commences

The Victorian Workers’ Wage Protection Act 2007 (‘the Act’) came into operation on 1st December 2008.

Further to our previous Employment Law Updates, the purpose of the Act is to prescribe the methods by which employers must pay their employees’ wages, as well as regulate an employer’s ability to make deductions from employees’ wages.

The Act also provides for enforcement provisions, including penalties of up to $10,000 per breach, against an employer if it fails to adhere to the requirements under the Act.

Whilst the Act commenced operation on 1st December 2008, the Act provides a grace period of until 1st June 2009, during which time a deductions clause in a contract of employment will prevail over the Act.

In summary, the Act provides that an employer must pay an employee’s wages:

  • in cash;
  • by cheque, money order or postal order;
  • by deposit into an authorised bank or credit union; or
  • by a combination of any of the above.

An employer must not make any deductions from an employee’s wages unless:

  • there is a valid written authorisation from the employee and the deduction is made in accordance with this authorisation; or
  • the employer is required or authorised by law, court order, or an industrial instrument (ie award or registered workplace agreement) to make the deduction.

Further, where an employer has proposed to make a deduction from an employee’s pay (i.e. where the deduction is not at the employee’s request), the employer must inform the employee, in writing, of:

  • the reason for the proposed deduction;
  • the identity of the person in whose favour the proposed deduction is to be made;
  • the amount of the proposed deduction;
  • whether the proposed deduction will be a single instance or multiple deductions; and
  • the date/s on which the proposed deduction/s will be made.

These provisions will have particular importance to employers who employ workers pursuant to 457 Visa arrangements, as the Act specifically prohibits any deductions for the purpose of the following:

  • any fee or cost in relation the placement of the 457 Visa employee’s employment; or
  • the provision of any goods, services or accommodation which the employer is required to pay.

These prohibitions apply even if the 457 Visa employee consents to the deductions.

Employers need to be aware of the provisions under the Act and ensure that their contracts of employment are compliant prior to 1st June 2009.

Author: Adrian Wong