Employers could face $10,000 fines for illegal workers as Federal Government unveils new laws

Rogue employers could face fines of $10,000 for each worker employed illegally, with the Federal Government unveiling new laws to battle a black market believed to comprise 100,000 people.

According to Innovation Minister Chris Bowen, successful prosecution of rogue employers has proved difficult under existing law, which he described as “impractical”.

“Many employers frankly laugh at the sanctions involved, do not take them seriously and know it is very difficult or impossible to prosecute them,” Bowen said earlier this week.

Bowen said illegal workers were often best placed to give evidence against their former bosses, but many were deported before proceedings could begin.

The Government now intends to adopt the recommendations of a new report by leading barrister Stephen Howells, including fines and infringement notices for the employers of illegal workers.

The Howells report recommends a three-tier system of strict liability sanctions, including the current provision for criminal prosecution, followed by $10,000 fines for each worker employed illegally and then $1,000 infringement notices for more minor breaches of the law.

Howells said in his report the failure to curb the labour black market had led to the exploitation of vulnerable individuals, abusive employment practices and encouraged organised crime.

The report estimates there are at least 50,000 illegal workers in Australia and potentially more than 100,000, with Howells describing the findings as a “significant problem”.

“It is also a concern to the Government because of its close association with cash economy industries, which are characterised by abuses of Australia’s tax, employment and welfare laws,” Howells wrote.

Bowen’s plan to adopt the recommendations has won the support of the Australian Council of Trade Unions.

“Current employer sanctions have been wholly ineffective as a deterrent, so this new law will mean employers who do the wrong thing will be able to be properly dealt with,” ACTU president Ged Kearney said in a statement.

Meanwhile, small business owners are being encouraged to verify information on all new and existing staff, regardless of the industry they operate in.

Matthew Tukaki, chief executive of consulting firm The Sustain Group, says employers need to determine an employee’s credentials prior to hiring them.

“Employers need to understand that a number of job applications will come from people who have no legal right to work in Australia or are applying from overseas,” he says.

“They need to state that applicants must have the right to work permanently in Australia.”

Tukaki also encourages employers to do some background research on each potential candidate, namely via Google and social media channels such as Facebook.

“Find out a little bit about the person or the organisation/s they worked for and, if you’ve found them through a recruiter, may sure their qualifications have been pre-checked,” he says.

“For start-ups, you don’t want to find yourself with someone who has faked their qualifications, particularly as start-ups are more inclined to profile that person on their website to make their credentials appear bigger than they really are.”

“[Failing to verify a candidate’s qualifications] puts a huge amount of risk on to your business, which could see it tarnished before it even gets going.”