Wage theft endemic across Australia

Working holiday visa holder Laurent Van Eesbeeck, 25, from Belgium who has been grossly underpaid working as a fruit picker around Australia.  Photo: Daniel Pockett

NOVEMBER 21 2017
THE AGE

A landmark study has found wage theft is endemic across Australia with a quarter of international students and a third of backpackers earning $12 or less per hour, around half the legal minimum wage.

The new report presents the most comprehensive Australian research conducted into the systemic underpayment of international students, backpackers and other temporary migrants around the country. It paints a bleak picture of the conditions experienced by a high proportion of the more than 900,000 temporary migrant workers who represent more than 10 per cent of the Australian labour market.

A landmark study has that found wage theft is endemic across Australia.

Two in five people surveyed for the report by law academics from the University of Technology Sydney and University of NSW received their lowest rate of pay while working in cafes, restaurants and takeaway food outlets. Almost a third of these workers were paid $12 per hour or less.

Almost one in seven working in fruit and vegetable picking and farm work – which the study found to be the worst paid – earned $5 per hour or less, and almost a third (31 per cent) earned $10 per hour or less. 

Belgian Laurent Van Eesbeeck, 25, told Fairfax Media he was paid as little as $5 per hour to pick cherry tomatoes in Bundaberg, Queensland in June this year and $60 for eight hours of work picking strawberries in Caboolture, north of Brisbane in August.

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He made $100 a day after tax for picking mandarins near Childers in Queensland, but said he had to live in a run-down caravan in a caravan park as a condition of the job.

He is currently based in Melbourne and plans to return to Belgium where he completed a degree in mathematical engineering after one year in Australia. He no longer wants to clock up the 88 days of farm work required to stay longer.

“I’ve had a couple of disappointments with Australian farms,” Mr Van Eesbeeck said.

“For me it’s exploitation …. I don’t want to be part of it.

“When you answer an ad online you are never sure whether it is going to be a good or bad job. You only know when you arrive there if the pay is decent.”

The report by law faculty academics Laurie Berg from the University of Technology Sydney and Bassina Farbenblum from the University of NSW was based on responses from 4322 temporary migrants from 107 countries. It was conducted online in 13 languages including English between September and December last year when the minimum wage for a casual worker was $22.13 per hour.

According to the authors, the new report, Wage Theft in Australia –Findings of the National Temporary Migrant Work Survey, presents “confronting data for educational institutions regarding their international students”.

“The findings raise challenging questions regarding the benefits that consumers may derive from wage theft in the form of lower-priced food, goods and services,” they said.

Overall, almost a third of survey participants said they earned $12 of less per hour and almost half (46 per cent) said they earned $15 per hour or less (excluding 457 visa holders).

The study found 44 per cent of overseas workers were paid in cash, including two in three waiters, kitchen hands and food servers. Half never or rarely receive a pay slip. Chinese workers were more likely than American and British counterparts to be paid in cash and without pay slips. 

A small proportion of workers, mostly in food services, had their passports confiscated by their employer or accommodation provider and 5 per cent paid an upfront deposit for a job in Australia. More than 100 (4 per cent) said their employer required them to pay part of their wages back in cash.

The report challenges government, business and educational institutions to take urgent steps to prevent and remedy systemic wage theft among temporary workers.

“This is essential both to safeguard the lawful entitlements of temporary migrants and to avoid the knock-on effect of driving wages below the lawful minimum for other workers in industries in which temporary migrants work,” the report says.

“For government, the findings demand examination of levels of resourcing required to address the scale of non-compliance and consideration of specialised programs and infrastructure to prevent and remedy wage theft and where the levers of reform may be found.

“At the least, this report highlights the responsibilities of employers, franchisors and businesses at the peak of supply chains to employ effective methods to detect wage theft in the knowledge that it is widespread.

“It also presents confronting data for educational institutions regarding their international students, and raises questions as to the support services those institutions should provide.”

The report also raises questions about the benefits consumers get from wage theft in the form of lower priced food, goods and services.

Ms Farbenblum said the study dispelled the myth that underpayment occurred because temporary migrants were not aware of the minimum wage rate.

“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,” she said.

The authors said the study findings were limited by the fact that the survey was anonymous which made it impossible to verify the accuracy of the information they were given by participants.

“However, there were not strong incentives for participants to provide inaccurate information or to repeat the survey multiple times; if this occurred it is likely to have involved only a small number of participants,” the authors said.

The survey distribution also relied on promotion through social media which may have contributed to under-representation of temporary migrants who do not use these networks. 

Key points:

● A quarter of all international students earn $12 per hour or less and 43 per cent 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.