Need to know
- Underpayment and exploitation of migrants on temporary works visas is a systemic issue in Australia
- Due to the wording of the Migration Act, migrants who speak out are at risk of losing their visas, but reforms will provide whistleblower protection
- Consumers can check to see if a business has been caught mistreating its migrant workers
For many migrants in Australia on a temporary work visa, being underpaid and exploited is part of the experience.
It's gotten to the point that some businesses depend on underpaying these workers to boost profits.
The unspoken rule for workers is to keep your mouth shut or you might be deported.
The unspoken rule for workers is to keep your mouth shut or you might be deported
That's in part because of section 235 of the Migration Act, a section the federal government has now committed to repealing.
If a migrant worker dobs in an employer for underpayment or being compelled to put in overtime, they're putting themselves at risk because – according to Section 235 – you're in violation of your visa conditions if you work more hours than you're supposed to.
It's a loophole that's kept a lot of mouths shut for a long time, which is probably why there have been no prosecutions for violating section 235 in the last 15 years.
The scale of the problem
In May last year, the Grattan Institute reported that between five and 16% of recently arrived migrants were being paid less than the minimum wage, somewhere between 27,000 and 82,000 workers.
Meanwhile, temporary migrant labour makes up about seven percent of our workforce, taking jobs that employers need filled.
But it's the migrants without particular skills attached to their visa conditions – backpackers and international students for instance – who fare the worst.
Waiters, kitchen hands or servers are most likely to be exploited
A survey of 4332 of these types of migrant workers published in 2017 by researchers from the University of New South Wales and University of Technology Sydney found that most of the underpayment occurs in food services jobs.
Waiters, kitchen hands or servers are most likely to be exploited, and they are also most likely to have their passports confiscated by employers.
Pay as low as $5 an hour
Nearly half of those surveyed for the 2017 report said they made $15 an hour or less, whereas the legal standard rate would have been between $22 and $24.
The worst pay happens in fruit and vegetable picking, where some are paid as little as $5 an hour or less.
Next comes convenience stores, petrol stations and car washes, where about a fifth or the workers are paid $10 an hour or less.
What consumers can do
You can find out if a business you frequent has historically mistreated its migrant workers.
The Australian Border Force (ABF) maintains a Register of Sanctioned Sponsors that lists thousands of businesses that have been caught out, which is searchable by postcode.
If you witness what you think is exploitation – or are the victim or it – you can report the issue anonymously to the ABF.
Exploitation back to pre-COVID levels
Laurie Berg, a senior lecturer in law at the University of Technology Sydney and an author of the 2017 report, says the post-COVID influx of international students and backpackers means exploitation is likely back where it was before.
"There are industries that are highly dependent on temporary visa holders, which is why there were such acute labor shortages when the borders were closed," Berg tells CHOICE.
The business model often relies on underpayment of temporary visa holders
Laurie Berg, Migrant Justice Institute
"I think that we as a society have come to expect low prices when it comes to things like fruit and vegetables and takeaway shops on sort of the lower end of the restaurant and hospitality scale. But the business model often relies on underpayment of temporary visa holders."
Berg says around three quarters of the unskilled migrant workers she and her colleagues surveyed said they were paid less than the minimum wage.
In their worst-paying jobs, a quarter were paid less than half of that.
Drifting deeper into exploitation
In June 2023, a federal government statement echoed the figures from the Grattan report, saying one in six recent migrants to Australia were being paid less than minimum wage.
"Over the last ten years our migration system has drifted deeper and deeper into reliance on low-paid temporary migrant workers who we know are routinely exploited," said Minister for Home Affairs Clare O'Neil.
The government has announced stiffer penalties for employers that exploit workers, and said it would repeal section 235 of the Migration Act.
Temporary migrant labour makes up about seven percent of our workforce, taking jobs that employers need filled.
Underpayment hard to detect
In July 2023, the Australian Border Force (ABF) visited 266 workplaces across Australia in a crackdown on employers exploiting workers on temporary visas.
"Migrant worker exploitation comes in many forms, including wage underpayment, pressure to work in contravention of visa conditions, threats of visa cancellation, working excessive hours and unsafe work practices," ABF Commander Vaughan Baxter said at the time.
The ABF told CHOICE in January this year that it found 25 instances of potential migrant worker exploitation in the July crackdown and issued 18 infringement notices totalling about $260,000.
The operational blitz targeted businesses that sponsor migrant workers, "which remains an ongoing priority", ABF spokesperson Commander Clinton Sims told us in January.
Every instance where a business is fined is preceded by months of monitoring, interviews, and reviewing payslips and financial documents
Australian Border Force Commander Clinton Sims
The focus was on "educating migrant worker sponsors about their obligations, migrant workers about their rights as well as enforcing the correct behaviour".
The low enforcement rate underscores how hard it is to substantiate exploitation.
"The work that goes into these cases is substantial. Every instance where a business is fined is preceded by months of monitoring, interviews, and reviewing payslips and financial documents," Sims says.
Large corporates also part of the problem
Some high-profile cases in recent years show that exploitation is not limited to smaller employers paying workers under the table. It can be part of the corporate business model.
A 2015 investigation by Fairfax Media and ABC Four Corners revealed that around two-thirds of the 7-Eleven convenience stores in Australia were paying some of their workers in the range of $10 an hour before tax. The award rate was $24 an hour at the time.
Exploitation is not limited to smaller employers paying workers under the table
In August 2023, the Fair Work Ombudsman secured a total of $375,515 in penalties on behalf of five migrant workers who were underpaid almost $200,000 over 20 months at waste management facilities in Melbourne.
But such outcomes are rare, Berg says.
For migrant workers on temporary visas, protecting and extending their visas is often the first priority.
Disincentives to speaking out
For the migrant workers, speaking out can be an act of self-sabotage, especially if the long-term goal is permanent residency.
Fewer than one in 10 in the UNSW/UTS survey who had been underpaid took steps to recover the money they were owed, often because they were worried about compromising their immigration status – that is, being deported.
Early last year, the Migrant Justice Institute, where Laurie Berg is co-executive director, and the Human Rights Law Centre (HRLC) led a national coalition of over 40 legal service providers, unions, ethnic community peak bodies, churches, and national organisations calling for new whistleblower protections for migrant workers.
If migrant workers can't speak up without fear of losing their place in Australia, most will never come forward
Sanmati Verma, Human Rights Law Centre
The move would allow workers to bring exploitation to light without jeopardising their visas, something that repealing section 235 alone won't accomplish.
"The conditions for exploitation are built into our visa system," says Sanmati Verma, managing lawyer at HRLC.
"If migrant workers can't speak up without fear of losing their place in Australia, most will never come forward. When they leave Australia, new migrant workers will simply replace them in those exploitative jobs."
Fear of visa consequences is a huge driver of exploitation
Laurie Berg, Migrant Justice Institute
Laurie Berg says the research backs this up.
"The fear of adverse visa consequences is a very potent one. Students who are working more than 48 hours a fortnight will have breached their visa and could lose it if they speak out. Yes, they were underpaid, but they also were working more than they were allowed."
Similarly, backpackers are unlikely to speak out when they're hoping to have their visas extended for a second year and their employer has threatened to not sign off if they complain about wages.
"Fear of visa consequences is a huge driver of exploitation, the silence around it, and the difficulty of enforcing labour law," Berg says.
Whistleblower protections a game changer
Berg points out that section 235 "actually criminalises work done in contravention of a visa", and its repeal is expected to happen this year.
It would mean migrants being compelled to work in breach of the Migration Act would still have the same workplace protections as all workers in Australia.
But it's the whistleblower protections that would be the real game changer, since they would specifically protect against visa cancellation when workers come forward.
Whistleblower protections would specifically protect against visa cancellation when workers come forward
Berg says this measure is also expected to come into effect this year. Without it, exploited workers are unlikely to ever report mistreatment.
"For the 15,000 migrant workers that we've surveyed, keeping their visa is the ultimate priority beyond any other interest or concern they have in Australia, because they either want to stay and try and get permanent residence or they just want to stay," she says.
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