Measures announced by the federal government to combat the exploitation of migrant workers have been welcomed by migrant and refugee advocacy groups.

The proposed changes would make it a criminal offence, potentially attracting a jail sentence, to coerce someone into breaching their visa conditions.

They would also stop employers from hiring people on temporary visas where they have exploited migrants in the past, and increase penalties.

The government will amend migration regulations to enhance labour market mobility for sponsored migrants in three types of visas by extending the allowable time between employer sponsors from 60 to 90-days, depending on the visa, to 180-days.

An additional $50 million will be provided to the Australian Border Force to help enforce the new laws and there are also plans for whistle blower protections for temporary visa holders and to strengthen cooperation between the Fair Work Ombudsman and Home Affairs department.

Launching the reforms recently the Minister for Immigration Andrew Giles described the current arrangement for many migrant workers as a “crisis of exploitation”.

“When migrant workers are being underpaid it hurts all of us, driving wages and conditions down for everyone,” he said.

“These reforms will help workers speak up and target those employers who do the wrong thing,” Minister Giles said.

Home Affairs Minister Clare O’Neil said past indifference to a workforce reliance on low-paid, temporary migrant workers who were routinely exploited would end with the Albanese government.

“We are in consultation on systemic changes to our migration system which will ensure it works in the interests of Australian workers and businesses and we are also doing the work necessary to ensure that no one who comes to this country is exploited or abused,” she said.

CEO of migrant and refugee settlement agency AMES Australia Cath Scarth welcomed the planned reforms saying they were overdue.

“We know that about one in six newly arrived migrants are paid less than the minimum  wage and we know and a recent study found more than half of job ads published in languages other than English are offering below the legal pay rate,” Ms Scarth said.

“We also know many temporary visa holders put up with mistreatment out of fear that their visa will be cancelled or they will lose their pathway to permanent residency if they are found working in breach of visa rules,’ she said.

The Federation of Ethnic Communities’ Councils of Australia (FECCA) also welcomed the reforms.

“The highly anticipated announcement marks a significant step towards safeguarding the rights and well-being of countless migrant workers who are integral to Australia’s economic prosperity,” said FECCA Chair Carlo Carli.

A recent report from the Grattan Institute found that the exploitation of migrant workers continues to be a scourge across Australia.

The report said up to 16 per cent of recent migrants are paid less than the national minimum wage and up to 9 per cent of all workers in Australia were paid less than the minimum wage in 2022.

Titled ‘Short-changed: How to stop the exploitation of migrant workers in Australia’, the report outlined recommendations to combat worker exploitation.

“Overall rates of underpayment fell during the pandemic, because of the departure of many temporary visa holders, the introduction of JobKeeper, and a strong jobs market. But we risk underpayment rising again now that the borders have reopened and many temporary visa holders are returning. Now is the time for the government to act,” the report said.

The report set out the three areas of reforms needed to stamp out the exploitation of migrant workers.

“First, visa rules that increase migrants’ risk of exploitation should be changed. Many temporary visa holders put up with mistreatment out of fear that their visa will be cancelled or they will lose their pathway to permanent residency if they are found working in breach of visa rules,” the report said.

“Temporary skill-shortage visas should be made portable, so migrants can flee from an exploitative employer,” it said.

The report said government’s recent decision to require employers to pay sponsored workers at least $70,000 a year will help reduce exploitation as higher-paid workers typically have more bargaining power.

But Australia’s working holiday visa program has drifted away from its original goal of promoting cross-country cultural exchange towards being a supplier of cheap labour on Australian farms.

“Rules that force working holiday-makers to work in regional areas to extend their stay in Australia should be abolished. Instead, working holiday-makers should be limited to a single one-year visa – what Australians are entitled to abroad,” the report said.

The report recommended the government commission a review of international higher education in Australia, with a brief to identify ways to reduce student exploitation and weed out dodgy course providers.

It said the government should also create a workplace justice visa, to enable migrants to remain in Australia for a limited time to pursue unpaid wages if their temporary visa is about to end.

The Grattan Institute report says workplace and migration laws should be strengthened and better enforced to deter exploitation.

“Few employers who underpay their workers get caught, and the penalties are far too small when they are caught,” it said.

“Employers who underpaid their workers were hit with penalties of just $4 million in 2021-22, compared to $3 billion collected by the Tax Office from tax offenders, and $232 million imposed by the ACCC for breaches of competition and consumer law.

“If we don’t take wage theft more seriously it will keep happening.

“More support should be offered to migrant workers who pursue their employer for unpaid wages, because right now too few exploited workers try to get their money,” it said.

“Migrant workers centres should be established in each state, to help educate migrant workers about their rights and connect migrants with suitable legal advice if they need it. And funding for community legal centres should be boosted.

“Australians are rightly proud of our heritage as a migrant nation. But the mistreatment of so many migrant workers is a national shame. It’s time we stamped out the exploitation of migrant workers for good,” the report said.