Wage Theft Rampant Among Migrant Workers in Australia

A third of international students and backpackers are paid about half the legal minimum wage, according to a major new report into wage theft in Australia.

A total of 4,322 temporary migrants from 107 countries across all states and territories were surveyed for the report – Wage Theft in Australia – which was undertaken by law academics from the University of Technology Sydney and University of NSW.

Among the key findings of the report was that a quarter of international students earned $12 per hour or less, and 43 per cent earned $15 or less in their lowest paid job.

A third of backpackers also earned $12 per hour or less, while almost half earned $15 or less in their lowest paid job.

“The study confirms that wage theft is endemic among international students, backpackers and other temporary migrants in Australia. For a substantial number of temporary migrants, it is also severe,” the report said.

“This raises urgent and challenging questions for a number of actors. For government, it demands examination of levels of resourcing required to address the scale of non-compliance, and consideration of specialised programs and infrastructure to prevent and remedy wage theft among temporary migrants.

“The findings also invite scrutiny of how certain businesses profit from wage theft and gain advantage over others that pay workers in compliance with Australian labour law, and how wage theft among temporary migrants may be driving wages down for all workers in certain industries.”

The report also refuted the perception that these workers are underpaid because they were unaware of minimum wage rates in Australia.

“Though they may not have known their precise entitlements, the overwhelming majority who earned $15 or less knew that the legal minimum wage was higher,” the report said.

“However, they perceived that few people on their visa can expect to receive minimum wages under Australian labour law, with at least 86 per cent believing that many, most or all other people on their visa are paid less than the basic legal minimum wage.”

Co-author of the report, Laurie Berg, said wage theft was not confined to fruit and vegetable picking or convenience stores, nor confined to any particular nationalities.

“A fifth of every nationality was paid around half the legal minimum wage. For almost 40 per cent of students and backpackers, their lowest paid job was in a cafe, restaurant or takeaway,” Berg said.

But the report did find that workers from Asian countries were more likely to be disadvantaged than workers from an English-speaking country.

“Predominantly English-speaking countries (US, UK and Ireland) had the highest proportions of temporary migrants earning more than $17 per hour (65 per cent of temporary migrants from the US, 62 per cent from Ireland, and 59 per cent from the UK).

“By contrast, several non-English speaking Asian countries had the lowest proportions of workers earning this wage rate (19 per cent of Chinese temporary migrants, 21 per cent of Taiwanese and 25 per cent of Vietnamese).”

In the wake of these findings, the Australian Council of Trade Unions (ACTU) slammed the Turnbull government, stating that they were “unwilling to stop employers breaking the law to protect working people”.

“The prime minister and his minister Michaelia Cash are more concerned with attacking working people than they are with ensuring that all Australians have their basic rights protected,” ACTU president Ged Kearney said.

“As a result, wage growth is the lowest on record, big businesses profits are booming, and a third of big businesses don’t pay any tax.

“Every worker in Australia is entitled to basic rights, but under this government that promise has been broken for thousands of workers.”

The report called for urgent action from the government and other key stakeholders to remedy the “bleak… overall picture of wage theft”.

“The findings demonstrate both the urgent need for action on the part of government, business, educational institutions and other service providers, and the complexity of the issues which demand multi-faceted structural and enforcement reforms,” the report said.

“As stakeholders address these challenges, this study creates new opportunities for evidence-driven strategies that respond to temporary migrants’ diverse personal experiences of work in Australia.”