Wage theft and the challenges of regulation

This chapter discusses Australia, a liberal market economy where wage theft has become a common business practice. It outlines the various dimensions of wage theft and identifies the circumstances in which wage theft is most likely to occur. The chapter considers the challenges of improving compliance and reducing wage theft. Wage theft takes diverse and novel forms but typically involves paying less than the minimum wage or failing to pay a component of wages. The widespread nature of wage theft and the seeming irrelevance of minimum standards in Australia have been identified by L. Thornthwaite. In several developed countries wage theft is closely connected to political campaigns seeking more effective regulatory responses to the exploitation of vulnerable groups of workers. Resource constraints and the challenges posed by systematic wage theft and the associated illegal activities necessitate regulators adopting strategic approaches. Creation of a crime of wage theft is often proposed and is presently under consideration by the Australian Government.