‘Wage Theft In Australia’–Bosses Exploiting Students


THE NATIONAL Tertiary Education Union (NTEU) has demanded that Australia’s government takes ‘urgent and immediate action to stop unconscionable employers ripping off international students by paying them well below the legal minimum wage’.

The NTEU called on the government to ‘crackdown on this illegal behaviour’ following Monday’s release of ‘Wage Theft in Australia: Findings of the National Temporary Migrant Work Study’, a landmark report by UNSW (University of New South Wales) Sydney and UTS (University of Technology Sydney).

It found that workplace exploitation of backpackers and international students in Australia is endemic and severe, with one in three international students and backpackers paid about half the legal minimum wage. The report draws on survey responses from 4,322 temporary migrants from 107 countries in all states and territories.

It was authored by Laurie Berg, a senior law lecturer at UTS, and Bassina Farbenblum, a senior law lecturer at UNSW Sydney. The report presents a national picture of the extent of wage theft among international students and backpackers in Australia, and how it varies across different nationalities, visas and industries, say the authors.

The study also dispels the myth that underpayment occurs simply because temporary workers don’t know the minimum wage, says Bassina Farbenblum. ‘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,’ Farbenblum says. Many overseas workers are paid in cash, including two in three waiters, kitchen-hands and food servers.

The study found 86 per cent of international students and backpackers earning up to $15 per hour believe that many, most or all other people on their visa are paid less than the basic national minimum wage. Co-author Laurie Berg says wage theft is not confined to fruit and vegetable picking or convenience stores, nor is it confined to any nationalities.

‘A fifth of every nationality was paid around half the legal minimum wage. For almost 40% of students and backpackers, their lowest paid job was in a cafe, restaurant or takeaway.’

Berg says the study also shows international students and backpackers encounter conditions that may constitute criminal forced labour. In 91 cases, respondents had had their passports confiscated by employers; 173 respondents were required to pay upfront ‘deposits’ of up to $1,000 to secure a job in Australia; and 112 respondents had been asked to pay money back to their employer in cash after receiving their wages.

The study also found 44% of overseas workers are paid in cash, including two in three waiters, kitchen-hands and food servers. Half never or rarely receive a payslip. The study raises urgent concerns about the actions and resourcing required of government, business, unions and other service providers to address the scale of non-compliance, says Farbenblum.

‘It provides compelling evidence for expanded services that respond to temporary migrants’ experiences, as shared directly by them.’

Key points:

• A quarter of all international students earn $12 per hour or less and 43% earn $15 or less in their lowest paid job.

• A third of backpackers earn $12 per hour or less and almost half earn $15 or less in their lowest paid job.

• Workers from Asian countries including China, Taiwan and Vietnam receive lower wage rates than those from North America, Ireland and the UK. Chinese workers are also more likely to be paid in cash.

‘These findings should be particularly troubling from the government’s point of view when you consider that education is Australia’s third largest exporter, contributing last year in the order of $22 billion for the Australian economy,’ said the NTEU National President Jeannie Rea.

‘A failure by the government to crackdown on this illegal behaviour will undermine international students’ confidence in the regulation of pay and working conditions thereby making Australia a less attractive destination for study.

‘In addition to cracking down on this illegal behaviour, the government and universities must do more to inform and educate international students about their industrial rights.

‘This must include the necessary information, encouragement and support to report any breaches. The report also found that students who worked more than 20 hours per week and therefore potentially being in breach of their visa conditions, earned substantially lower wages than other students.

‘This strongly suggests that some employers may be exploiting the fear of being reported for visa condition breaches as a way of effectively silencing students into reporting instances of underpayment. This cynical exploitation of vulnerable students must stop now,’ concluded Rea.

Gerard Dwyer, National Secretary of the SDA (Shop, Distributive and Allied Employees Association), one of the largest trade unions in Australia with more than 230,000 members, said: ‘This is a national disgrace and our Federal Government is just sitting back and allowing it to happen.

‘Australia prides itself on our good treatment of our workers, yet here we have tens of thousands of young workers being exploited right under our noses and the Federal Government is doing nothing to address it. This isn’t confined to one or two convenience store chains – this is an epidemic that is stretching into stores in every town across the country.

‘This report confirms what we’ve long suspected – that our international students are falling through the cracks. Now that we’ve got the evidence, we need to know what the government is going to do about it. The Prime Minister needs to detail exactly what his government is going to do to address this problem. It’s not good enough for him to sit on his hands and allow vulnerable young workers to continue to be exploited in this way.’

ACTU (Australian Council of Trade Unions) President Ged Kearney said: ‘Stealing workers’ wages is a crime, and it’s rife. Our broken laws are inadequate to deter employers. When workers’ wages are stolen, there’s very often no penalty, or a penalty so weak, employers just wear it as a cost of doing business.

‘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. Employers are flaunting our laws with alarming regularity and exploiting migrant workers. It’s disgraceful that workers are being forced to pay thousands for their visas, having their passports taken away, being forced to pay back some of their wages and being paid cash in hand.

‘Wage theft has to stop. Workers must have quick and easy access to justice and unions which can protect their rights. These workers know they are being underpaid but are either too scared to say anything, or are simply accepting that their legal rights will be denied. They need more power.

‘We have to change the rules and end this pattern of wage theft and abuse of labour rights. Academics Laurie Berg and Bassina Farbenblum have illuminated the experiences of temporary visa workers and we hope that the Turnbull Government will act swiftly to address these alarming revelations.’

• ‘Campaigner Sorcha Harrop, a 24-year old hospitality worker and bartender addressed the following letter to: PM Malcolm Turnbull:

‘Take Wage Theft Off The Menu. Make It A Criminal Offence

‘For almost a year I worked at one of Melbourne’s hottest restaurants, famous for its no reservations policy, long queues down the street, fabulous food and outstanding service. It’s not cheap, but it’s worth it. What you don’t know is that the people who make it such a hot destination are forced to do 14-hour long days and work up to 20 hours a week for free.

‘I worked through breaks, battled stress, exhaustion and was underpaid at least $9,500. This is wage theft. And it’s happening to hospo workers everywhere: 77% of hospitality employers are stealing workers’ pay, a new survey has revealed.

‘We’re not paid penalty rates. We’re doing many hours of unpaid overtime and some of us get paid just $10 per hour. We are fed up. We are saying enough is enough. Stand with me and other hospo workers getting ripped off.

‘Stealing is wrong. Yet every year hundreds of thousands of hospo workers in Australia are robbed. We are victims of wage theft. Wage theft, where companies deliberately underpay workers or refuse to pay superannuation, is also hurting people working in retail, farms and fast food.

‘If workers stole from the till, we could go to jail. But if bosses steal from us, all they have to do is pay it back, if they’re ever caught. How is that fair? The rules are broken. The current laws make wage theft too easy and the punishment is too light. It’s now so common it’s become a business model. Venue owners right now are getting rich by stealing from their staff.

‘Prime Minister, if you are serious about upholding the law, make wage theft a criminal offence and introduce much bigger fines. We need to hold companies to account for their theft.’