IN BRIEF
- Researchers warn migrant worker exploitation is becoming embedded across sectors of the economy.
- International students are losing an estimated $61 million in wages every week.
For months, a young migrant worker says she was underpaid and denied basic workplace protections while working at a Canberra café.
In court documents, the worker described being cornered by her manager in the kitchen after a late shift, saying she felt "frozen" and feared something worse would happen if she resisted his sexual harassment.
When she later took legal action, the employer denied the allegations, threatened legal costs and entered liquidation the day before the hearing.
Court findings later revealed the worker had also been issued misleading payslips with listed superannuation contributions that were never paid.
The Federal Court ultimately ordered the manager to pay tens of thousands of dollars in damages and penalties after finding he had sexually harassed and underpaid the worker while exploiting her vulnerability as a young migrant employee.
Advocates say her experience reflects a much larger pattern of exploitation facing migrant workers across the country.
New data reveals the scale of migrant worker underpayment
A survey by researchers at UNSW reveals Australia’s international students are being underpaid by an estimated $61 million every week or $3.18 billion annually, in a system the report says is built on migrant worker exploitation, embedded across the economy.
The report is the largest national survey of migrant worker conditions ever conducted in Australia, based on responses from nearly 10,000 migrant workers nationwide.
It found that two in three employees were paid less than their legal entitlements under the Fair Work Act, while more than a third earned below the national minimum wage.
Report researcher associate professor Bassina Farbenblum from the University of NSW School of Law, told SBS News that the wage theft is often tied to a broader network of insecure work practices and weak oversight.
"Underpayment doesn't just happen in a vacuum, it is part of an interlocking system," she said.
"The more underpaid the worker was, the more likely they the more likely that they did not receive payslips, were paid in cash, had deductions from their wages, weren't paid super, or even that they experienced forced labour indicators."
The study also found migrant workers who experienced the most severe underpayment were more likely to be employed in coercive working conditions associated with modern slavery indicators.
A system reliant on worker exploitation
Researchers say the findings point to migrant workers being trapped in a sophisticated system designed to keep them underpaid and difficult to protect.
Many workers cited fears around insecure employment arrangements, visa consequences and widespread use of ABN contracts as reasons for staying silent about exploitative practices.
Another 38 per cent of the workers surveyed were employed casually, leaving employers with significant control over when, and if, they received work.
In total, the report revealed nearly three-quarters of migrant workers surveyed were employed either casually or through ABN arrangements.
An ABN arrangement classifies workers as independent contractors rather than employees, meaning they are responsible for their own tax and super and may miss out on minimum wage protections and leave entitlements.
The practice, often known as 'sham contracting' has been widely criticised for disguising an employment relationship as an independent contracting arrangement.
The report also found that casual and ABN workers were twice as likely to be paid less than the National Minimum Wage.
Farbenblum emphasised that arrangements of this nature can make severe underpayment harder to detect or challenge.
"If you're on an ABN, you're not even entitled to protections under the Fair Work Act, when actually we know that most of those people who were on an ABN were actually misclassified employees and they shouldn't have been on an ABN at all," she said.
The toll of exploitation
The CEO of the Migrant Workers Centre, Matt Kunkel, said the estimated $3.18 billion lost to wage theft each year represents not just a loss for migrant workers, but a broader hit to the Australian economy.
He says money could otherwise be flowing back into local businesses instead being retained by employers engaging in underpayment.
"Migrant workers also face disconnection from the rest of the community when they're nottreated as an equal and lesser than other workers who were born in Australia, so it is not just an economic issue," he said.
'Single architecture of exploitation'
The data suggests ABN misuse and falsified employment records are not isolated issues, but interconnected practices used across industries that rely heavily on temporary migrant labour.
The report warns that the issue is distorting competition across the economy, with compliant businesses being undercut by operators reducing labour costs through systematic underpayment.
"Migrants on temporary visas are always extremely worried about anything that might affect their visa, and, and it makes it really hard for them to speak up safely, because they have no guarantee that their visa will be protected," Farbenblum said.
Calls for reform
The report suggests the Albanese government’s first-term workplace reforms , including criminalising wage theft and expanding protections for gig economy workers, may not be enough to address deeply embedded migrant worker exploitation.
It calls for stronger protections for migrant workers reporting exploitation, easier pathways to challenge sham contracting, and tougher enforcement in industries heavily reliant on insecure migrant labour.
Farbenblum said the study's findings provide a clearer road map for regulators and businesses to identify exploitation and underpayment practices.
"It's critical that migrant workers be able to safely speak up, and the first thing the government needs to do is expand the protections for migrant workers, including the workplace justice visa."
She said the report calls for a review of limits on international student work hours, with many students saying the restrictions pushed them towards underpaid or non-compliant jobs because employers were reluctant to hire workers with capped availability.
Kunkel told SBS News that while wage theft against migrants has long been an "ingrained, systemic issue", the organisation has observed a gradual shift from cash-in-hand payments to sham contracting arrangements that can obscure workers’ legal entitlements.
"We need to see improved protections for workers to blow the whistle… The government's recent protections, including workplace justice, are a good start, but they must be expanded out to provide genuine protection."
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