Revelatory report from largest ever study of migrant working conditions

The report, “Off the Books: Inside Australia’s hidden system of migrant exploitation”, reveals the extent and detail of migrant worker exploitation nationally, but importantly, it also provides a number of interventions to redress legal loopholes that employers are resorting to presently, and amendments to legislation that could enhance migrant worker protections.

Laurie Berg is the Co-Executive Director, Migrant Justice Institute, and Associate Professor, Faculty of Law at the University of Technology, Sydney.

She says, “We got 9963 participants. It’s a lot of people. Overwhelmingly, they were currently on temporary visas. The survey was open to anyone in Australia or overseas who had worked in Australia on a temporary visa.”

The easily navigable, interactive report reveals that two in three migrant employees are paid less than their legal minimum hourly rate; the rate of use of ABNs to engage migrants on visas is four times that of ABNs used to engage the general workforce (most were likely misclassified employees); 40 per cent of casual and ABN workers are paid below the National Minimum Wage; and $61 million in estimated unpaid wages are owing to international students every week, adding up to more than $3 billion a year.

The report is based upon years of observation and surveying migrant workers, and it reflects the experiences of thousands of workers from 140 countries who live and work across Australia. The authors of the report, and those within the Migrant Justice Institute, are emphatic that this is not an area to wring hands over, but one to get hands dirty in repairing. There is opportunity, there are solutions, and there is a public and political will to do so.

‘There isn’t cause for despair here’

Berg says, “We found that all of this isn’t intractable. There isn’t cause for despair here. When workers regain the power to advocate for themselves, all of those systems of exploitation tend to break down.”

To that end, Berg explains, “Our recommendations included the need to combat the misuse of ABNs. There were changes introduced under the Albanese government in that domain, in relation to sham contracting and misclassification, but we feel that the extent of misclassification that we found, and the connection to exploitation, really mean that it has to be made easier for workers who are on an ABN to enforce their rights.”

The reforms introduced within the first term of the Labor government are important steps in the right direction, the report acknowledges. However, as the report states, “they are inadequate to address of the widespread, deliberate underpayment of migrant workers revealed in this report”. Accordingly, the priority is to enhance the systems and response to workers’ or whistleblowers’ reports of noncompliance, the enabling of misclassified ABN-holders to more easily prove they are employees, and the enabling of regulators to hold dishonest businesses to account.

Berg says, “We need to do more to enable migrants to report abuse. We’ve got to expand access to the Workplace Justice Visa, which was also introduced in the first term of the Albanese government.”

The Workplace Justice Visa, part of the Subclass 408 Temporary Activity visa pilot, allows temporary migrant workers in Australia who have experienced workplace exploitation to remain in the country to pursue legal action.

“We need to resource legal assistance, of course, and reform legal processes to reclaim unpaid wages,” says Berg. “For instance, we have advocated for the creation of a new jurisdiction in the Fair Work Commission to permit claims of underpayment. And we have called for consideration of the establishment of a new Fair Work Court with co-appointment of commissioners and judges to streamline wage recovery.”

The reforms require a whole-of-government enforcement in those industries deemed high risk, and mandatory human rights due diligence for businesses that will require them to identify migrant exploitation in their operations and supply chains.

Berg says, “The sort of the industries that came up were hospitality, retail, and nail salons, which were particularly problematic. Those were the most acute, but a lot of industries outside of the professional and technical industries showed high rates of exploitation.”

Expansion of the Fair Work Commission’s jurisdiction

As far as extending the Fair Work Commission’s jurisdiction, Berg acknowledges that there are some constitutional issues that create complexity.

“But we have urged government to work on trying to overcome any of those constitutional barriers and do what can be done constitutionally to allow migrant workers to reclaim their wages at the Commission.”

The reason being that the well-structured and comprehensive systems inherent to the Commission make it best-suited to hearing, investigating, and acting upon the reports of migrant and other vulnerable workers.

“It is accessible to migrant workers, and it has case management systems that go much further to support migrant workers,” says Berg. “The Small Claims jurisdiction in the Federal Circuit Court is currently the federal legal process that is available to migrant workers, but because it is a Chapter III court, we have found in other research that the sort of formality and technical nature of that jurisdiction make it very difficult for migrant and other vulnerable workers to access justice there.”

Berg refers to the Migrant Justice Institute’s July 2024 report on legal processes that set out the arguments for expanding the Fair Work Commission and a Fair Work Court. The ‘All Work, No Pay’ report revealed that, in 2022-23, the Small Claims jurisdiction of the Federal Circuit and Family Court, only 137 migrant workers attempted to recover their wages this way. That is a drop in the ocean in the estimated 0.5 to 1.5 million workers being paid below minimum wage, let alone thousands of others who are not paid what has been agreed.

The small claims jurisdiction was introduced to make recovery of wages in court more accessible, ‘efficient’ and ‘expeditious’ by the court, and ‘not subject to onerous procedural requirements’.

The report concluded that “[i]n reality, it is virtually impossible for most migrant workers to file and pursue a small claim without legal assistance.”

Berg admits she wasn’t surprised by the findings on underpayment, but the survey was revelatory, nonetheless.

“I was struck by the sort of outpouring of anguish that we got from thousands of workers who used the open-response opportunity to tell us what it was like working in this country, and how this system operates for migrants working on visas.”

She refers to a migrant worker on a sponsored visa. The main options in that category are the temporary Skills in Demand (subclass 482) and permanent Employer Nomination Scheme (subclass 186). From 1 July 2026, a minimum salary threshold of $79,499 is required, along with English proficiency, skilled occupation and relevant experience.

Berg says, “One South African man who works in construction on a sponsored visa told us, ’We, as migrants, feel that we have no rights, especially against an Australian employer. They make you understand you are worth less here.’”

She laments that thousands of migrants told the Migrant Justice Institute about the leverage that employers have over them, especially when they are engaged on ABNs or as casuals.

“They told us how much they need these jobs and how great the stakes are in terms of fearing job loss, or fearing loss of their visa, that causes them to stay silent.”

Misclassification widespread and pernicious

Berg explains that over a third of participants worked on an ABN, and “our estimate is that most of them were misclassified. So, it’s not just that they were on an ABN, but it was that they’re actually working as an employee.”

Those workers told the survey that they either did not understand that they’d been misclassified, and genuinely assumed that they didn’t have rights as an employee because they were on an ABN; or, if they knew there was something dodgy going on, they felt complicit, so they then stayed silent for fear that raising the misclassification would put their visa at risk in some way.

“We really do need to address this very widespread misclassification,” Berg emphasises.

Berg tells LSJ Online that she believes that there is political will for the changes being proposed by the Migrant Justice Institute in this new report.

“I think that the status quo is not only a failure of migrant protection; it’s also a market integrity failure,” she says.

“Honest businesses are being undercut by competitors who are gaining a cost advantage on the backs of migrants. And I think consumers generally across Australia don’t want to buy goods and services that are produced by exploited migrants, but at the moment, we all almost certainly do so.”

Ultimately, Berg adds, “Our view is that it shouldn’t matter who it is that’s caring for your grandparent, or serving you coffee, or building your house. Everyone deserves fair and safe workplace conditions, starting with getting paid what they’re owed under Australian law. But 10,000 workers told us, in six languages that this is very far from that situation.”

The recommendations

The recommendations of the new report are as follows:

The report breaks down each of its recommendations in thorough detail, but in summary, their eight key recommendations are to:

• Expand sham contracting accountability.

Reduce the burden on workers to prove misclassification, strengthen enforcement of misclassification and sham contracting laws, and consider accessorial liability for sham contracting within business operations.

• Protect workers who report abuse.

Strengthen and expand access to the Workplace Justice Visa and reduce reliance on employer sponsorship for permanent residency pathways.

• Expand proactive detection and support.

Invest in whole-of-government enforcement processes targeting poorly performing industries with insecure migrant workforces and establish dedicated migrant worker support services including Migrant Worker Centres in every state and territory and increased FWO support.

• Link sponsorship eligibility to compliance.

Connect government agency and court data to DHA to ensure business eligibility to sponsor migrant workers takes account of prior workplace noncompliance, and industry-level risk.

• Increase transparency and accountability.

Introduce a national Labour Hire Licensing Scheme and an enforceable risk-based due diligence obligation under the Modern Slavery Act, reform payslip obligations to prevent businesses from disguising noncompliance, and explore strengthened general protections preventing employer retaliation against migrant workers.

• Ensure migrants recover the wages they are owed.

Establish underpayment jurisdiction in the Fair Work Commission alongside a new co-located Fair Work Court, extend the Fair Entitlements Guarantee to migrant workers, and create a government-funded wage guarantee scheme.

• Increase cap on student working hours.

Explore increasing the work limitation on Student visas above 48 hours per fortnight to reduce exploitation risks and respond to increased cost of living in Australia.

• Invest in compulsory worker rights education.

Ensure visa holders receive clear, accessible information about workplace rights and support services at key touchpoints, including with visa grant and multiple times post-arrival.