A third of backpackers and a quarter of international students in Australia are being routinely ripped off by employers who are paying them $12 an hour or less, according to a new study.

The study says this rate of pay is about half the minimum wage and alleges criminal behaviour by employers such as confiscating passports or demanding wages back in return for keeping a job.

The study’s authors law academics Laurie Berg, of UTS, and Bassina Farbenblum, of the University of NSW, say the “overwhelming majority” of workers were aware they were being underpaid but simply expected it.

Their report said underpayment was widespread across numerous industries but was especially common in food services, and especially severe in fruit and vegetable picking.

“Severe underpayment was experienced by every major nationality of backpackers and international students in this country – at least one in five Americans, British, Indians, Brazilians, and Chinese earned roughly half the minimum wage,” the report said.

“At least three quarters of underpaid international students and backpackers know that they’re being paid less than the minimum wage. One reason they stay in these jobs paying illegally low wages is that the overwhelming majority believe that everyone else on their visa is earning less than the minimum wage too,” it said.

“A substantial number were working in conditions that could amount to criminal forced labour, including being required to pay cash back to their employer after receiving their wages, having their passport confiscated by their employer, or paying an upfront ‘deposit’ for their job,” the report said.

One worker surveyed by the report said he was working 55-to-70-hour working weeks and in constant fear that he would face deportation if he did not pay back some of his wages.

The survey, the most comprehensive study of wage theft and working conditions among international students, backpackers and other temporary migrants in Australia, drew on responses from 4,322 temporary migrants across 107 nationalities of every region in the world.

The respondents were working in a range of jobs in all states and territories.

The report also showed the worst-paid jobs were in fruit and vegetable picking and farm work, where 15 per cent earn $5 an hour or less and 31 per cent $10 per hour or less.

It said half of those working as waiters, kitchen hands and food servers are were $15 an hour or less and underpayment is also rife for those working at petrol stations or convenience stories, car washes and in retail.

The report said people from Asian countries such as China, Taiwan and Vietnam had the lowest wage rates overall, while those from major English-speaking countries like the US and the UK had the highest.

Three per cent of respondents said their passport had been confiscated by their employer, five per cent paid an up-front deposit for a job and four per cent had to pay cash back to their employer from wages, the report said.

The authors said contrary to misconceptions, 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,” Ms Farbenblum said.

ACTU president Ged Kearney said Australia’s visa system had created a pool of easily exploited labour, which employers exploit at the expense of migrant workers.

“Our broken laws not only facilitate the theft of wages, they have facilitated big businesses importing what amounts to a slave labour class of workers on temporary visas,” Ms Kearney said.

“We have to change the rules and end this pattern of wage theft and abuse of labour rights,” she said.

Chair of the Federation of Ethnic Communities Councils (FECCA) Mary Patetsos said the findings of the report were “appalling”.

“The results of this report further confirm that migrant workers including students and backpackers are being grossly underpaid and need stronger protections,” she said.

“We call on the Government to ensure employers are held to account for any exploitation and that all relevant regulatory bodies are sufficiently resourced to ensure these vulnerable workers are protected and paid a fair wage,” Ms Patetsos said.

Laurie Nowell
AMES Australia Senior Journalist