Wage theft is a design feature of Australia’s temporary visa system, a report from the Migrant Workers Centre shows, in which uncertainty about residency is a key driver in exploitation.
The survey-based report shows that 65% of workers on temporary migration visas have suffered wage theft, and 25% some other form of workplace exploitation.
It also shows a high level of incomprehension about Australian workplace laws among temporary visa holders: 50% had never heard of penalty rates and more than a third had never heard of most of the basic ideas behind industrial relations legislation like workers’ compensation.
What the report also explores is how visa uncertainty is crucial in enabling worker exploitation.
There is a dramatic difference in wage theft levels between temporary workers on a pathway to permanent residency, and those without any pathway: “The survey results show a positive correlation between migrant workers’ original entry visa types and their experience of exploitation … 90.9% of migrant workers who experienced wage theft in Australia had originally arrived with a visa with no pathway to permanent residency such as Student or Working Holiday visa.”
In contrast, just 9% of wage theft victims had arrived on some kind of pathway visa.
The result — if not the sheer size of the disparity — is unsurprising: workers without a ready path to permanent residence are less likely to remain in Australia to report their exploitation, and those on pathway visas and not reliant on employers to keep them on so they can remain in Australia are more likely to stand up for their rights, move jobs to avoid exploitation or gravitate to better-paid professions. This disparity in exploitation isn’t affected by education levels: employers will exploit both well-educated and poorly educated employees without visa certainty.
The report is another step in our understanding of wage theft: it is not a flaw in the existing system that has been widely exploited by employers, but a design feature that has enabled Australian employers to increase profits and suppress wages. Consider the extent of wage theft:
- The remarkable diversity of organisations involved: large retail employers Bunnings, Target, Super Retail Group, 7-Eleven, Subway and Ampol; the Commonwealth Bank, NAB, Westpac, the ABC, Monash, Melbourne, UNSW and Sydney universities; prominent law firms, prominent restaurateurs; Crown, a host of smaller retailers, NGO Red Cross, Optus, IBM, Telstra, Regis Healthcare, the Australian Sports Commission;
- The Fair Work Ombudsman (FWO) announced last week it had started legal action against Coles, claiming it had underpaid 7500 employees a total of $115 million between January 2017 and March 2020; that follows the FWO taking Woolworths to court in June over its $390 million (including interest) underpayment of staff; the Finance Sector Union today revealed it will launch a major court action against NAB in relation to wage underpayment and unpaid overtime
- The amount repaid by major companies and organisations to workers in recent years is over $1.1 billion. This doesn’t include wage repayments forced on smaller firms by the FWO, which last year reached $150 million, nor systemic wage underpayment in the construction and notorious horticulture sectors
- According to the ACTU in a 2020 submission, “estimates from accounting firm PwC suggest underpayment affects as much as 21% of employees in high-risk industries such as construction, healthcare, retail, accommodation and food service, and as much as 13% of the total workforce. Construction is the biggest risk area, with as much as $320 million in annual underpayment of wages, according to the modelling of Fair Work Ombudsman data”
- Nearly 90% of job ads in foreign languages specified below-award rates of pay, according to a Unions NSW survey
- A South Australian parliamentary committee report released last week concluded “wage theft was found to be pervasive across South Australia among vulnerable cohorts of workers … wage theft has become the basis of a business model.”
In industries where high levels of underpayment occur, that flows through to employers committed to doing the right thing by workers, who may continue to pay legal rates of pay but be reluctant to offer wage increases for fear of becoming less competitive with other employers who steal wages.
The steadily mounting evidence shows that Australia’s economic history of the last decade must be re-evaluated: wage theft has not been an incidental, occasional feature of the industrial relations system, but a key, intentional characteristic of Australian industrial relations that has had a significant positive impact on corporate profitability and significant negative impact on household income, directly through lower wages and indirectly through pressure on wage growth.
For some sectors of the workforce — younger people, specific industries and temporary migrant workers — wage theft is a standard fact of working life. And the migration system is specifically designed to increase precarity and uncertainty, making workers more vulnerable to exploitation.
Given the role played by poor household income growth in Australia’s tepid economic growth prior to the pandemic, any economic policy or analysis that fails to recognise wage theft is a design feature of the Australian economy is wilfully blind.
Wage theft is part of the business model in hospitality. Its by design. As soon as a chef gets to Sous level they are put on a contract with 25% above award and told to work “reasonable overtime.” Reasonable overtime wortks out to being 20 -40 additional hours per week. The chef HAS to sign that contract in order to progress.
You can’t just go home in the middle of service, so you are forced to stay and work the hours. If you don’t them come in early the next day, the next days service cant get done. Its a never ending cycle of exploitation.
And this is not just in small restaurants, its a feature of many major hospitality employers across the country, large hotel chains and function centres included.
Its why people are leaving the industry in droves, and why large employers want the pliable migrant workers. Its not that the country doesnt have trained available workers, its the business model of wage exploitation that is the problem.
Downward-pressure on wages has been a consistent theme of the current FedGovt since the WorkPlace Relations Act 1996.
As you state here it’s become pervasive, its a business model.
One of the unforeseen consequences of all this is the impact 25 years of wage-stagnation has had on on the capacity of the workforce to also parent the economy’s next generation of workforce members.
It works like this.
People spend approx 40-45 years in workforce, so assume roughly 1/40th to 1/45th of our workforce will exit the workforce each year; so 1/40th of 13.4mio is 335,000 “workforce humans”…will exit each year.
Before we get any GDP growth, that 335k MUST be replaced.
However, if only about half of your workforce has an income level that also allows them to be “the main breadwinner” that puts enormous downward pressure on your birthrate too – which is only now starting to bite.
To replace the 335k, look at birthrates 15-25 years ago; they averaged about 255k/year.
But…sadly about 15k dont make it, so work with 240k/year coming into our workforce.
Then consider the workforce participation rate; 64.7% is the ABS number, so of your 240k you have 156k “locals” joining the workforce, so we’re about 179k workers short of the 335k we need just to stop GDP going into reverse.
Of course we import the shortfall of 179k.
But then we want GDP growth and we’re getting that mostly by adding headcount to the workforce, because productivity growth has been awful.
So if we want say 1.5% GDP growth, maybe add 1% to the workforce by importing an additional134k humans.
Look at that in aggregate in any given year; we add 156k locals to the workforce and MUST add 313k “imported humans” to get that 1.5% GDP growth.
At that rate only 33% of the new workforce entrants in any given year are locals.
Since the gap is increasing it will keep reducing below 33%.
This is a comprehensive re-engineering of the very fabric of Australia.
Given that the average household income of a family with dependent children is about $170k, and for single-parent households its $75k, it is clear that there is now a “breeding class” in Australia and a “Non-breeding class”.
The median income is $59k, so we have 6.7mio workers on $59k or considerably less, probs insecure income, subject to wage-theft and there’s your “Non-Breeders” right there.
They are not earning enough to also be parents.
Run this over the next ten years and that will see us adding around 3.5mio “imported humans” to the workforce, likely on lower wages, but only 1.6mio locals.
It’s a bit like a new version of slavery; come here, contribute your labour, dont breed, then die.
And it all helps to depress wages.
Good analysis too. The 1996 Workplace Relations Act was brought in to not so much suppress wages though that may have been its effect though this too is not legislated as much as determined by the forces of supply and demand for labour and even then contingent upon sectoral issues. 1996 was a vulnerable time for the economy emerging from years of recession slowly and a policy of wage recession would have plunged the economy back into a major double dip recession. What the WRA1996 did was enshrine enterprise bargaining, wind back the power and presence of the old IRC, phase put Federal Awards and replace them with EAs or CAs (collective agreements) and allow “flexibility” of recruitment and employment into the Commonwealth Public Service, including introducing management initiated part time employment and casual employment. I didn’t think Howard was deliberately out to reduce working conditions until business leaders and other free market fundamentalists got into his ear about how much wages were increasing, particularly in the mining and engineering sectors, and he introduced WorkChoices. Since then conservatives have been about little else economically than encouraging wage theft and wage suppression.
++ exactly. just be sure never to mention all those >500k using minimisation to pay less tax than a single-parent household.
The hatchet job of the BLF by Labor, the LNP, business interests and especially Newscorpse, but all media really, was the beginning of the collapse of the public perception of the integrity of unions.
My own perception was of a pack of hard drinking bullies which I learnt from Australian media.
The idea was that militant unions had no place in our gentrified modern world and that Norm Gallagher was corrupt.
The papers went to great lengths to show how corrupt he was, he built a holiday house with leftover materials on the cheapest bit of coastal land in the state, with help from fellow union members.
Considering that most volume builders always had a lot of left over materials that it was easier to scrap than store ,his level of corruption seems tiny compared to , say the media or the business interests and political parties behind economic rationalism.
Holding the country to” ransom” was the LNP/media catchcry-.. as opposed to breaking down hard fought rights and quality of life for the general public for profits going straight in to the coffers of private corporations.
Norm Gallagher and his union would certainly have fought to stop this current wage abuse from happening.
Ahh, memories of such innocent times.
What wage slave today would not walk over broken glass to have a similar union on their side?
And then came the Accord and all was silence.
https://vuir.vu.edu.au/22018/
This hardly new, going back to my teen years – that really was a verrrry long time ago – so often we, my peers and I, were employed in a job we truly wanted but once we reached an age where our wage should rise, out the door we were kicked and it happened again when some of us reached adult wage time. Having joined the nursing profession kept me safe, although the hours were horrendous especially night duty; start at 8pm and finish at 9am a d still had to study. So, what’s happening now is going backwards.
Wage theft in the Film and TV industry is most definitely part of the modus operandi. I’m fact, nobody wants to look at it becuse the whole industry would collapse. It’s combined with over work in chronically unsustainable hours, dangerous conditions, cronyism, rampant job insecurity that relies on systemic nepotism and subjective favouritism, an empty hole where a HR system is supposed to be, endemic bullying and a structure that outcasts whistle-blowers at a ground level. Nobody wants to touch it because of the ‘prestige’ it brings. It’s the only industy I know of that works a standard 50 hour week (with an expectation of free work after hours) and the wages haven’t moved for 30 years. The funniest thing is it’s considered so ‘high end’ and the perception that one is somehow ‘lucky’ to have ‘broken in’ to the industry enables this abuse that burns people out very young. It’s less a job than a club!
Luvvies in a cold yartz climate – mine heart bleedeth not.