Laurie Berg, University of Technology Sydney and Bassina Farbenblum, UNSW Sydney
A 28-year-old international student from Pakistan took a job as a chef in Queensland. His employer paid a flat hourly rate that was well below the legal minimum, with no payslips. When he eventually left, his employer hired the next new arrival.
“It is like an ecosystem,” he told us, “and everyone passes through it.”
His experience is not an outlier. Our new report, published today by the academic-led Migrant Justice Institute, shows that for migrants working on temporary visas, it is the norm.
Drawing on the largest national survey of migrant workers ever conducted in Australia, we found two-thirds of temporary visa holders were paid less than they were legally owed. A quarter were shortchanged by at least A$10 an hour.
We estimate across Australia, international students alone are being underpaid by around $61 million every week – more than $3 billion a year.
This is not just a failure of worker protection – the system is also allowing exploitative employers to thrive by systematically undercutting honest businesses that do the right thing.
To fix the problem, we must first understand how exploitative employers give themselves maximum power with minimum visibility.
Exploitation not a few rogue employers: it’s a core business model
Our new research draws on a survey of almost 10,000 workers on temporary visas in Australia conducted in 2024. Around 80% were international students.
Respondents provided a wide range of details about their workplace experience, including their job, hours, working conditions, wages (and how these were paid) and employment arrangements.
What we found was not a collection of isolated violations or inadvertent errors. It was an interlocking system of deliberate exploitation.
The worse the underpayment, the more likely the same employer was paying wages in cash, issuing fraudulent payslips that disguised the true hours worked, and withholding superannuation.
We found even more egregious working conditions that are indicators of forced labour – being made to work in unsafe conditions, for no pay, or being threatened with harm – rose sharply the more the migrant was underpaid.
‘Sham contracting’ replaces cash-in-hand
Since our 2016 study, the percentage of participants receiving cash-in-hand payments (which are difficult to trace) has actually fallen, from 44% to 23%. But other mechanisms for hiding underpayments have replaced cash use.
In particular, we found widespread misuse of Australian Business Numbers (ABNs) to engage workers as independent contractors. In many cases, employers had likely misclassified these workers who should have been hired as employees.
Over a third of migrants in our survey (35%) were engaged as independent contractors – more than four times the rate across the national workforce.
For many, this was likely deliberate – a practice that’s known as “sham contracting”. This practice violates strict rules about who can legally be engaged as a contractor, and who must be treated as an employee.
We suspect many businesses in hospitality, retail and commercial cleaning are unlawfully retaining migrant employees on ABNs to sidestep minimum wages, penalty rates after hours, casual loadings for non-permanent workers, obligations to pay super and Fair Work Ombudsman oversight.
Insecure work
ABN misuse is only one way that employers use insecure work structures to exploit migrants.
A further 38% of survey respondents were engaged as casual employees, which means their employers had complete power over whether and when they could work. Combining ABN workers and casual employees, three-quarters of migrants were in insecure work arrangements.
In many cases, it appeared these insecure arrangements were used to avoid detection of severe underpayment.
Some 85% of all ABN workers were paid less than they would have received as a casual employee under the Fair Work Act.
Casual employees were also twice as likely as permanent employees to be paid below the National Minimum Wage.
How employers coerce migrants to stay in exploitative jobs
Many workers told us they kept quiet about underpayment for fear of losing the hours they had. Some ABN workers wrongly assumed that they had no legal rights at all. As one Filipino student put it:
My salary was less than what was agreed. But I don’t feel like I can do anything about it since I’m on ABN.
For international students, the 48-hour-per-fortnight work cap creates an additional trap.
Many told us lawful employers turned them away because of their limited work hours. They said the only jobs available were those that were “off the books”: non-compliant, underpaid jobs with no oversight.
What needs to change
The Albanese government’s first-term reforms – tighter sham contracting laws, a new criminal wage theft offence and new protections for gig workers – were designed to fix known gaps in existing workplace laws.
But alone, these reforms are not enough to address the entrenched exploitation our research reveals. Our report makes a number of recommendations, including for the government to:
- expand the Workplace Justice visa to allow more exploited workers to safely come forward
- reduce the burden on workers to prove they’ve been misclassified
- increase whole-of-government enforcement action against industries where insecure migrant work is concentrated
- reconsider the current limits on the number of hours international students are permitted to work.
For the first time, we can see how the system operates clearly. The government and business should now embrace this opportunity to invest in genuinely dismantling it.
Laurie Berg, Associate Professor of Law, University of Technology Sydney and Bassina Farbenblum, Associate Professor, UNSW Sydney
This article is republished from The Conversation under a Creative Commons license. Read the original article.
