Thursday, September 03, 2020

Wage Theft in Australia

In what is an open secret, bosses are  exploiting the lack of knowledge around Australia’s industrial relations system among migrant communities – particularly where they speak languages other than English – hiring people into jobs that pay as little as $5 an hour.  When asked why the figure they were given is so low, an employer answered: “We have our ways.”

Though there are no specific figures to quantify how exposed international students are to wage theft, but one estimate suggests $270m in South Australia is lost each year.  The accounting firm PWC, however, last year to calculated  to be in range of $1.35bn.

In Australia, the fair work ombudsman sets the minimum wage. As of 1 July 2020 the absolute minimum wage was $19.84, or $753.80 a week, though the exact minimums change depending on industry and how a worker is classified. According to the ombudsman’s wage calculator, a person aged 20 years or older working as a casual in the hospitality industry should earn about $25 an hour.

Dodgy employers  will tell the Australian Tax Office that an employee is working a certain amount of hours at the correct wage. In reality they may be working twice as long, meaning their real wage is half.
The Working Women’s Centre director, Abbey Kendall, says, “For international students, they’re living in another world when it comes to work. If you are an international student you are lucky to get the minimum wage in Adelaide. Usually we think about labour markets as being our normal industrial relations system and black markets, where people do cash-in-hand or work off the books. These international students exist in a labour market that sits outside our industrial relations system. This is farm-to-table. It happens on the farms up through to the restaurants, to the cleaning services. And it’s not just South Australia. It’s everywhere.”
Edward Cavanough, manager of policy at the McKell Institute, says the situation for international students and those on working on holiday visas is dire.
 “International students are taken advantage of because of the stringent visa conditions and the power balance between them and their employee,” Cavanough says. “Often international students don’t even get given the correct information that explains their rights at work. This is bad for a range of reasons. It undercuts the businesses doing the right thing. It impacts revenue when you have people doing it off the books. And then it impacts the economy, because you have these international students who don’t have the money in their back pocket to pay for things.”

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