Key Points
- Recently arrived migrant workers are 40 per cent more likely to be underpaid than long-term residents.
- A co-author of the report says the environment is ripe for wage theft to rise again.
- A package of reforms is being proposed to reduce wage theft with a "budget neutral" outcome.
Tens of thousands of migrants arrived in Australia recently to work, only to be paid below the minimum wage.
That's the finding of a new which found was "widespread".
The report, which analysed Australian Bureau of Statistics (ABS) data, said up to 16 per cent of recently-arrived migrants were paid below the national minimum wage of $21.38. That's more than double the rate of underpaid local workers.
International students, skilled temporary residents, seasonal workers, working holiday makers, and New Zealand citizens were among the up to 82,000 migrant workers on temporary visas who were underpaid.
Report co-author Trent Wiltshire said the true figure was likely to be much higher as there were forms of migrant exploitation that may not be captured in the ABS data collected.
"Even with the most conservative measure, it highlights the scale of the problem. And its [true figure] probably even larger than that, " he said.
He said the tougher economic environment and elevates the risk for migrant exploitation.
With , an economic slowdown is expected and the unemployment rate is forecast to rise over the next year.
"That will also place pressure on a lot of workers," Mr Wiltshire said. "We are potentially going to see underpayment exploitation start to rise again."
The report says worker exploitation of migrants could be "stamped out" by measures like reforming the visa system, stronger enforcement of legal protections by authorities to protect migrant workers, and improved mechanisms for them to recover wages.
Mr Wiltshire said the workplace regulator, the Fair Work Ombudsman, should publish an annual report that detailed the extent of underpayment among migrant workers.
Migrant workers 40 per cent more likely to be underpaid
The research found that migrant workers arriving in Australia in the past five years were 40 per cent more likely to be underpaid compared with long-term residents with similar skills working the same job, after demographic factors were controlled for in the data analysis.
The long-term residents include Australian-born workers and those who arrived in the country more than 10 years ago.
"So that means a range of factors are driving underpayments for migrants that lies outside the factors of industry type, skill and age," Mr Wiltshire said.
"We think points to things like discrimination, potentially a worker's qualifications not being acknowledged in Australia, having weaker networks, and therefore having weaker bargaining power; and also visa rules attached to the temporary visas, which may make the migrant more vulnerable to exploitation."
The industry types where underpayment of migrants was more prevalent included agriculture and hospitality at the top of the list and financial services at the bottom.
The chart shows a list of job sectors and the prevalence of the underpayment of wages for migrant workers. Source: Supplied / Grattan Institute
"Temporary migrants ... are typically younger, typically have lower skills, typically working in industries that are more exposed to underpayment."
Research in 2018 conducted by academics Laurie Berg and Bassina Farbenblum found that only nine per cent of 4,322 temporary migrant workers surveyed .
Heftier fines and a new levy could fund new reforms
Beyond the three measures - across visas, enforcement and wages recovery mechanisms - to tackle the problem, researchers also said more funding and powers could be given for a rebranded Fair Work Ombudsman as the new 'Workplace Rights Authority'.
"The name change will also more clearly reflect its role as an enforcement agency, rather than [operating] as a mediator," Mr Wiltshire said.
The report finds that the Fair Work Ombudsman is understaffed to undertake the scale of enforcement needed with the equivalent of one inspector per 100,000 workers. The 2023-24 total budget of $170 million for education and compliance activities equates to $12 per worker in Australia.
It suggests the enforcement powers could be strengthened through a stronger legal framework, such as a national wage theft offence with a maximum jail term of 10 years. Such a penalty is already legislated in Queensland and Victoria.
"Deterrence is best achieved when employers believe it is likely that they would be caught for breaking the law, and fear the punishment that comes with it. Reputational risks also appear to be an important form of deterrence for larger companies," the report said.
The report co-authors also proposed additional resources for the Department of Home Affairs to help enforce fines and sanctions for businesses breaching their obligations, and conduct audits.
Increased funding is also recommended to expand the Migrant Workers Centre model in Victoria to other states and territories.
Matt Kunkel, the CEO of the Migrant Workers Centre in Victoria, said since the centre was set up in 2018, the workload has been unrelenting - even during the pandemic when migration numbers .
"I think one of the things that we've learned in the first five years of our operation is just how needed organisations like ours are in the community," he told SBS News.
"Part of building a migration system that works for everyone in Australia is about building that support around migrant workers so that they can get access to information and support in their own language."
Government flags changes
, led by reviewers including former senior public servant Dr Martin Parkinson, was released in April.
It described key areas of the system covering 153 visa types as "broken", finding that a heavy reliance on temporary migrants had "caused harm to Australia and to migrants, and undermined community confidence in the migration system".
Addressing the National Press Club last month, Immigration Minister Clare O'Neil said the government was committed to providing pathways to permanent residency for temporary migrant workers, with announcements forthcoming on changes including for international students.
There are 1.8 million migrant workers on temporary visas in Australia, accounting for 13 per cent of the labour force and representing a group that has increased by nearly two-fold over the last 15 years.
