Survey Unveils Migrant Worker Exploitation in Australia

International students are being underpaid $3.18 billion in wages every year. Australia's largest ever survey of migrant workers reveals how.

A survey of 10,000 migrants has found that Australian businesses systematically underpay migrant workers. Two-thirds of employees were paid less than they were owed under the Fair Work Act - a quarter were underpaid by at least $10 per hour.

The report calculates that international students alone are being short-changed by around $61 million every week, or $3.18 billion per year.

The findings are released today in Off the Books: Inside Australia's hidden system of migrant worker exploitation , authored by the Migrant Justice Institute (MJI) - led by academics Associate Professor Bassina Farbenblum at UNSW Law & Justice and Associate Professor Laurie Berg at the University of Technology Sydney (UTS) Law.

This is the largest national study of migrant working conditions ever conducted in Australia, under the Commonwealth Attorney-General's Department National Action Plan to Combat Modern Slavery grant program. It yielded 9963 responses from international students, sponsored workers, graduates, backpackers and other temporary visa holders working in Australia, in six languages. It reveals not just widespread underpayment, but how employers cover their tracks.

A system, not scattered bad actors

For the first time, the data show 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 deeper the underpayment, the survey found, the more layers of concealment surround it.

"Three quarters of migrants worked on an ABN or as a casual employee," said MJI Co-Executive Director, A/Prof. Bassina Farbenblum.

"These were migrant workers whose shifts could be easily cut or stopped altogether in retaliation for complaining 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."

In fact, more than a third of migrant workers in the survey (35%) were engaged on an ABN, which is more than four times the rate in the general Australian workforce. In most cases, the report found, these workers were likely misclassified employees who were engaged on an ABN to avoid the minimum wage, superannuation and the oversight of the Fair Work Ombudsman.

"Alongside cash wages, misuse of ABNs has emerged as a core strategy for paying migrants 'off the books' and concealing non-compliance," MJI Co-Executive Director, A/Prof. Laurie Berg said.

"The vast majority - or 85% of ABN workers - were paid less than they would have been paid as an employee under the Fair Work Act.

"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."

A/Prof. Farbenblum said many migrant workers were too afraid to speak up.

"Nearly 10,000 workers told us again and again of their fear - of losing shifts, of immigration consequences, of being reported to authorities by the very employer who was underpaying them," 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. The system is now clear, and demands a deep and urgent government response."

A/Prof. Berg said it's time businesses took some responsibility.

"Business can't keep treating this as someone else's problem," she said.

"If they are sourcing goods or labour, they should know what those workers are actually being paid. The indicators are hiding in plain sight - no payslips, cash wages, ABN arrangements in industries where they make no sense. Any business that looks will find them. The question is whether they want to look."

A/Prof. Farbenblum said the mistreatment of migrant workers by some businesses was also hurting businesses paying proper wages and entitlements.

"This is a market integrity failure and everyone is paying the price. Honest businesses are being undercut by competitors gaining a cost advantage on the backs of underpaid migrant workers. Nobody wants to buy goods or services produced by exploited migrants in Australia - but right now, we all almost certainly do."

Read the full report: Off the Books: Inside Australia's hidden system of migrant worker exploitation