The Victorian government will become the first state to criminalise wage theft if Labor wins November's election. Victorian Premier Daniel Andrews will on Saturday announce that the most serious offenders would face up to 10 years in jail and fines of up to $950,000.

NSW Labor last year announced it would criminalise wage theft if it wins government in March next year and has also pledged to tackle the need for regulation of pay and conditions for workers hired through online job platforms.

Labor's employment spokesman Brendan O’Connor has said that while some forms of employer conduct including modern slavery and labour trafficking should attract criminal penalties, "industrial relations should be in the civil law realm".

“Labor believes very significant civil penalties, particularly against big companies, are needed for intentional systemic underpayment," he said. “If the states think they need to change their criminal law then that’s a matter for the states.”

Federal Workplace Minister Craig Laundy said the vast majority of employers do the right thing, "but anyone that doesn't, yes we should fine them and get backpay".

Mr Laundy said most employers the Fair Work Ombudsman identified in a recent hospitality industry blitz had made genuine administration mistakes and those mistakes were better addressed through education, not jail.

"Information is the key here, not throwing people in jail," he said.

Transport Workers Union national secretary Tony Sheldon will press Labor to address wage theft and the need to regulate the gig economy at the ALP's national conference later this year.

"It’s time we stopped using polite language to describe it," he said. "It is stealing and it should be treated that way by governments and the legal system.

"We will be pushing for the adoption of a wage theft resolution at Federal ALP conference this year. Employers which steal from their workers should be in jail."

Mark Morey, Secretary of Unions NSW said gig economy platforms were exploiting legal loopholes which meant independent contractors had no rights under federal employment laws.

“This is driving down wages, but also putting a wrecking ball through safety and licensing," Mr Morey said. "We expect future state and federal Labor governments to act and rein in this ‘catch us if you can’ business model.”

Mr Laundy said the gig economy was in its infancy and it would be premature to try and regulate it through statute. He said the best approach to regulation at this early stage was through the evolution of common law principles through the courts and tribunals.

"It gets regulated over time as it develops," he said.

NSW Labor spokesman for Industrial Relations Adam Searle said that as technological innovation continues to develop, more and more workers would be in non-standard forms of work which were not regulated by state or federal laws. NSW Labor has already committed to criminalising wage theft if it wins government next year.

"There has to be a new architecture to ensure they are properly protected with minimum pay and basic conditions that the community rightly expects," he said.

"The Labor Party will be addressing the issue of making sure people who work in the gig economy have minimum pay and safe workplaces like other workers."

Australian Industry Group chief executive Innes Willox said there was no need for new state laws because federal laws already address the issue. He said workplace relations laws and awards were complex and underpayments were often the result of genuine misunderstanding and pay errors.

"Criminalising underpayments and labelling underpayments as "theft" would deter business owners from employing people and investing," Mr Willox said.

“The Fair Work Act already contains very large penalties for employers who underpay workers and those who do not keep the required pay records. These penalties were recently increased by up to 20 times.

“Underpaying workers is not acceptable behaviour. However, “wage theft” is an emotive term coined by the union movement designed to tarnish all employers. It describes something which is already effectively and comprehensively addressed in legislation."

James Lea, 24, from Melbourne will address the Victorian Labor Party Conference on Saturday after being underpaid in four out of five hospitality jobs he has had in the past four years. He was paid nothing at all for a work trial at one cafe.

He said he was excited Premier Daniel Andrews had acted to criminalise wage theft.

"I think there been overhwhelming support for the campaign to criminalise wage theft," he said.

Mr Lea was backpaid more than $13,000 last week with the help of United Voice which provides template letters to employers as part of its digital union platform called Hospo Voice.

"It is about time we changed the law to help exploited workers so we don't have to constantly have to fight for what we are entitled to."

Jessica Walsh, secretary of United Voice Victoria, said when workers speak out and name and shame venues, other employers take notice and change their behaviour.

"Making wage theft a crime is a game changer for young hospo workers. It means employers wouldn't be able to just ignore or intimidate their staff when they speak out, because the stakes will be a whole lot higher. They would have to pay the legal minimum award, or face jail time," she said.

National Union of Workers Victorian secretary Gary Maas said his members were confronted with employers that pay well below the minimum wage and who do not pay penalty rates or superannuation.

"This widespread wage theft is pushing workers into poverty," he said.

"Every day of the week NUW members fight for the simple right to be paid correctly."

With Ben Schneiders