Australia’s temporary migrant workers face widespread underpayment, with new research connecting wage theft to modern slavery risks in supply chains.
The Migrant Justice Institute found two-thirds of these workers earn less than the legal minimum, and one in four are paid at least $10 less per hour. The severity of underpayment increases the likelihood of coercion, intimidation, or restricted freedom—key signs of forced labor.
Underpayment as a warning sign of exploitation
The report informs Off the Books: Practical Guidance for Business, a framework created by Walk Free, the Office of the Australian Anti-Slavery Commissioner, and the institute. The guidance highlights risk factors such as ABN misuse, insecure casual contracts, misleading payslips, cash payments, and underpayment for night or weekend shifts.
Associate Professor Bassina Farbenblum, a co-author, stated these practices frequently appear together in industries like horticulture, hospitality, cleaning, and retail. She noted some businesses reduce costs through underpayment and systems designed to conceal it. The guidance advises companies to verify records, cross-check data, and speak directly with workers instead of relying only on paperwork.
Temporary visa holders often remain silent due to fear of retaliation or visa cancellation. The power imbalance is clear: nearly 10,000 surveyed workers explained how employers’ control over their visa status leaves them exposed. Associate Professor Laurie Berg, another co-author, said the pressure to accept exploitation becomes overwhelming when a worker’s right to stay depends on a single employer.
Australian Anti-Slavery Commissioner Chris Evans emphasized that underpayment can signal deeper risks in a business or its supply chain. He stated companies must identify these problems, correct them, and implement systems to prevent recurrence.
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Exploitation isn’t limited to hidden sectors. Most Australians have likely bought goods or services produced by underpaid migrant workers without realizing it. The research indicates the issue is so common in some industries that it has become standard practice.
Government steps up pressure on large companies
The federal government recently announced plans to introduce a criminal offense for companies that fail to prevent modern slavery in their operations. The proposed law would apply to businesses with annual revenues over $100 million, making them responsible for risks in their supply chains.
The change acknowledges that underpayment often leads to more severe labor abuses. While the guidance lacks legal force, it offers businesses a way to detect and address risks before they worsen.
The guidance suggests practical steps: verifying worker identities, comparing payroll records with bank transactions, and establishing safe reporting channels. It also warns against relying on labor hire intermediaries without independent oversight.
Progress will be difficult. Many businesses operate in competitive markets where reducing labor costs is seen as essential. Others may not recognize the problem, assuming suppliers or contractors handle compliance. The new criminal offense could drive change, but its impact depends on how aggressively regulators enforce it.
Businesses must recognize that underpayment is more than a financial issue. It serves as a warning—and overlooking it may enable far worse outcomes. Small businesses opting for takeaways over in-house meals highlight how cost pressures shape industry practices, but migrant workers bear the heaviest burden when those pressures lead to exploitation.
