Wage Theft in Australia

A third of backpackers and a quarter of international students in Australia are being routinely ripped off by employers who are paying them $12 an hour or less, about half the minimum wage. A comprehensive survey on temporary migrant visas, by three universities in Sydney, has painted a grim picture of systemic exploitation of visitors to Australia, with some cases detailing criminal behaviour by employers such as confiscating passports or demanding part of wages back in return for keeping a job. The survey revealed the practice of wage theft was widespread and there had not been an effective response from the Australian government, unions or employer groups. The study also dispels the myth that underpayment occurs simply because temporary migrants do not know the minimum wage.

One of the report’s authors, Bassina Farbenblum, said: “We found the overwhelming majority of international students and backpackers are aware they are being underpaid. However, they believe few people on their visa expect to receive the legal minimum wage.”

The study found 86% of international students and backpackers earning up to $15 an hour believe that many, most or all other people on their visa are paid less than the basic national minimum wage. Underpayment was widespread across numerous industries but was especially prevalent in food services and especially severe in fruit and vegetable picking.

38% had their lowest-paid jobs in cafes, restaurants and takeaway shops. Almost a third of these were paid $12 an hour or less. Half were paid $15 or less. At the time of the survey, the legal minimum wage was $22.13 but often cafe workers are entitled to weekend rates that further raise their legal minimum wage.

In fruit and vegetable picking – which international backpackers must do for 88 days in a rural area order to qualify for a second-year working holiday visa – the degree of wage theft was extreme. Almost one in seven participants working in fruit and vegetable picking and farm work earned $5 an hour or less. Almost a third (31%) earned $10 or less.

The exploitation was widespread across all 107 nationalities identified in the survey but Chinese international students, who make up the bulk of international students in Australia, were particularly vulnerable to being underpaid. Some 31% were paid $12 or less. Students from other Asian countries also had high levels of underpayment. Some 27% of students or working holiday makers from the UK reported being paid $12 or less in their lowest-paid job in Australia. Among the Irish it was 25% and among Americans 20%. Students from European nations such as Germany or Italy fared even worse, with more than a third earning less than $12.

Laurie Berg, a senior law lecturer at University of Technology Sydney said the study showed conditions that might constitute criminal forced labour.

Ged Kearney, the president of the Australian Council of Trade Unions, said: “Our broken laws not only facilitate the theft of wages, they have facilitated big businesses importing what amounts to a slave labour class of workers on temporary visas. Wage theft has to stop. Workers must have quick and easy access to justice and unions which can protect their rights.”