Exploitation of Migrant Workers Set to Increase

Natural disasters, the Covid-19 pandemic and a federal election may have knocked the exploitation of international students and temporary visa holders off the front pages of the newspapers, but it remains a significant issue in Australia – and a hidden one as workers are often unaware of their rights or too scared to speak out for fear of repercussions.

There are concerns the problem could get a great deal worse as international borders reopen and students return to a nation desperate for workers, which now allows their hours to be limitless.

Exploitation of migrant workers

Not only will this allow wage theft and exploitation to continue, it could also mean that students will prioritise work over study commitments – many of them come from cultures where there is an expectation that once they are earning, they should send money back home to support the family. 

This presents a real problem for Australia, not for the first time. 

In 2019, the Report of the Migrant Workers Taskforce found that about one-quarter of international students were paid around half the legal minimum wage, with exploitation of international students labelled “endemic”.

Around the same time as the report was released, numerous reports detailed some real life case studies – McDonalds and Seven-Eleven were named as two of the most prolific offenders and there were renewed calls for wage theft to be made a crime. 

In 2020, a report by Big Four accounting and consultancy firm PwC estimated that around 13 percent of Australia’s total workforce were affected by underpayment, with higher rates in certain industries, such as the hospitality sector.

A systemic problem 

Australia is already in the midst of dealing with several very serious cases of wage theft conducted by some of Australia’s largest and most well-known companies and institutions including Qantas, National Australia Bank, the Australian Broadcasting Corporation and the big supermarkets.

Coles was last year accused by the Fair Work Ombudsman of shortchanging more than 7,500 workers by $115m between January 2017 and March 2020. 

While it might be reasonable to say that Australia’s award wage system, classifications for employees, along with tax and superannuation can be exceptionally complicated. And if the big companies – such as Crown Casino – can’t get it right, what hope do small businesses (the majority of Australian businesses) have?  

That said, it’s really no excuse for not ensuring that workers are paid appropriately for the work that they do.  

Recently, the Australian Tax Office also came under fire for dragging its heels in chasing rogue employers who have not paid billions of dollars to employees in super entitlements. 

A Senate Committee set up in 2019 to investigate the unlawful underpayment of employees has recently finalised its report and has recommended that the Federal Government make changes to the Fair Work Act to outlaw wage theft. It also noted that some companies deliberately engage in systemic wage-theft in order to drive down costs and increase profits. 

The senate committee found that hospitality, universities, horticulture and cleaning are among the worst-offending industries. It put the value of under-payments and unpaid superannuation is estimated to be in excess of $6 billion a year. 

Workers’ rights are human rights 

The senate committee also found that the current legislative and regulatory framework is inadequate and recommends legislation that would apply to all types of wage theft, including loadings, penalty rates, overtime, leave, allowances and the superannuation guarantee. 

The report also contains several recommendations to protect migrant workers, including protecting whistleblowers and temporary visa holders who report exploitation or wage theft.

Several jurisdictions around Australia including Victoria and Queensland have already made wage theft a crime. In New South Wales an Act to amend the Crimes Act 1900 to make it an offence for an employer to fail to pay a worker’s wages and other entitlements; and for other purposes was introduced to the Legislative Council in 2021, but has not yet progressed further.