A new study has exposed chronic underpayment of migrant workers with two-thirds being paid below award rates and 36 percent below the minimum wage.
This amounts to an average underpayment of $8.80 per hour. International students alone are being underpaid $3.18 billion in wages every year.
The survey of 10,000 migrants found that many Australian businesses “systematically underpay” migrant workers.
The study, titled Off the Books: Inside Australia’s hidden system of migrant worker exploitation, was led by Associate Professor Bassina Farbenblum at UNSW Law & Justice and Associate Professor Laurie Berg at the University of Technology Sydney (UTS) Law.
It was commissioned by the Migrant Justice Institute (MJI).
The study found that 35 percent of migrants worked on an ABN, more than four times the rate in the general workforce and 38 percent were casual employees.
“The data shows that the more a migrant worker is underpaid, the more likely they receive fraudulent or no payslips, are paid in cash, are denied super, have unauthorised wage deductions, and experience coercive working conditions that are indicators of forced labour,” the study report said.
“The deeper the underpayment, the more layers of concealment surround it.”
Associate Professor Farbenblum said migrants working casually or on an ABN could easily have their employment cut off if they complained about their conditions
“Unsurprisingly, casual and ABN workers were twice as likely to be paid less than the National Minimum Wage – let alone casual loading and penalty rates,” she said.
“Some workers were explicitly threatened. Others didn’t need to be. The threat was implicit in every casual roster and every ABN arrangement. When an employer controls whether you work next week and whether your visa remains intact, the power imbalance is enormous, and predictably employers exploit it.”
Associate Professor Farbenblum described the situation as a “market integrity failure”.
Honest businesses were being undercut by competitors gaining a cost advantage by underpaying migrant workers and most Australians were “almost certainly” buying goods and services produced by exploited migrants.
Associate Professor Berg said that, alongside cash wages, misuse of ABNs had emerged as a core strategy for paying migrants “off the books” and concealing non-compliance.
“The vast majority (85 percent) of ABN workers were paid less than they would have been paid as an employee under the Fair Work Act,” she said.
“This isn’t a gap in the system. It is the system. Data shows for the first time that underpayment, misuse of ABNs and falsified records are not separate problems – they operate together as a single architecture of exploitation when it comes to migrant workers.
“Businesses that want to underpay migrant workers have a ready-made toolkit, and too many are using it.”
The report recommends:
- Enabling migrants to safely speak up by strengthening the Workplace Justice Visa and reporting protections, urgently ensuring accessibility across all states and territories
- Expanding sham contracting accountability and reducing the burden on ABN workers to prove misclassification
- Linking employers’ eligibility to sponsor migrants to their compliance history, using data from the FWO, ATO and courts
- Expanding proactive detection and support, investing in whole-of-government enforcement targeting industries with highly insecure migrant workforces, and expand dedicated support for migrant workers through the FWO, Migrant Worker Centres, Community Legal Centres and Legal Aid
- Introducing enforceable due diligence obligations under the Modern Slavery Act for Australian operations
