Budget 2019: Millions for Fair Work Ombudsman sham contracting crackdown squad

The coalition wants to crack down on sham contracting and has proposed giving the Fair Work Ombudsman (FWO) an extra $9.2 million over four years and $2.3 million each year in ongoing funding to get the job done.

The funding would see the FWO establish a dedicated sham contracting unit to root out employers engaging in the behaviour, particularly those who “knowingly or recklessly misrepresent employment relationships as independent contractors to avoid statutory obligations and employment entitlements”.

The unit will be tasked with increasing education, compliance and enforcement activity around sham contracting and will be dedicated additional resources to investigate and litigate cases.

The measure, outlined in the 2019-20 federal budget on Tuesday, is part of a broader focus the coalition is placing on black economy activity ahead of the election.

Also included in the budget was $19.8 million in extra funding for the FWO to help establish a national labour hire registration scheme, a key recommendation of the recent migrant worker taskforce review.

The scheme would force labour hire operators in high-risk sectors such as horticulture, cleaning, meat processing and security to register with the government.

The majority ($10.8 million) of the funding will be dedicated to enhancing the FWO’s capacity to investigate underpayment and related issues in the sector and also deliver on an education mandate.

“This will raise vulnerable workers’ awareness of their rights and of the government help available to them, and will also raise employers’ awareness of their responsibilities under workplace laws,” the government said in its budget papers.

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