Migrant wage theft booms

Via Domain:

Migrant workers in Sydney are being systematically underpaid and a union analysis of more than 3000 foreign-language job ads reveals offers of illegally low wages as low as $8 an hour are rife.

The analysis of Chinese, Spanish, Korean, Vietnamese, Nepalese and Portuguese ads from December 2019 until last August in NSW found 88 per cent of the ads in community websites, Facebook pages and media outlets offered wages below industry minimums.

Unions NSW is using the data to push for the labour movement to be given powers to enter workplaces and inspect books for underpayment to complement the work of the industrial umpire. This plan was considered and rejected in the federal government’s recent industrial overhaul that instead racheted up penalties for employers.

Construction and hair and beauty were the industries with the highest rates of ads for below-award wages, the union audit found. They each had average underpayments of $6.20 and $4 respectively. The lowest single hourly wage was $8 an hour, in the beauty industry.

Let’s recall the pandemic of wage theft that swept the Australian labour market last cycle.

A major sting by Fair Work Ombudsman (FWO) targeting the Degraves Street and Hardware Lane dining precincts in Melbourne and Brisbane’s West End uncovered widespread wage theft between December 2018 and March 2020:

It found that 84 per cent of the 49 businesses in Melbourne’s precincts and 88 per cent of the 44 in Brisbane’s West End were not compliant with Australian workplace laws.

It recovered $194,365 in missing wages for 186 Melbourne workers and another $309,073 for 369 Brisbane workers…

“Competitive dining strips commonly rely on workers who are young, students or visa holders. We will continue to protect such vulnerable employees by holding employers to account,” Ombudsman Sandra Parker said, describing the low rates of compliance as unacceptable…

The businesses were selected based on anonymous reports and FWO intelligence, with the Ombudsman noting that these precincts are “high-risk sectors” that prey on vulnerable workers like university students.

The FWO also investigated another 171 businesses, uncovering a non-compliance rate of 71 per cent. Across those businesses, another $709,289 was recovered for 796 chefs, cooks, waiters and shop assistants.

This follows a similar audit released by FWO in December, which yielded similar results:

Inspectors audited 156 businesses in Adelaide (Gouger Street, Grote Street, Rundle Street and The Parade), Melbourne (Swanston St, Lygon Street, Sydney Road and St Georges Road), Sydney (King Street in Newtown) and Perth (James Street and Francis Street in Northbridge).

Inspectors found that 75 per cent of the audited businesses in Adelaide, Melbourne, Sydney and Perth breached their obligations to workers under workplace laws, leading to 608 workers requiring back payments.

Overall compliance rates varied across the precincts, with 85 per cent of Melbourne businesses found to be non-compliant with workplace laws; 62 per cent of Adelaide and Northbridge businesses; and 54 per cent of Newtown businesses.

The most common breaches related to the underpayment of minimum hourly rates (34 per cent); failure to provide payslips in the prescribed form (15 per cent); and underpayment or non-payment of weekend penalty rates (11 per cent)…

As noted in The SMH:

Fair Work Ombudsman Sandra Parker said the fast food, restaurant and cafe sector has become a key problem area for workplace law compliance, made problematic as staff can be more vulnerable, with higher levels of workers that are young, migrants, or from non-English speaking backgrounds.

It’s the same story on Australia’s farms, with dodgy labour hire companies accused of exploiting migrant backpackers:

There are concerns some labour hire companies exploit workers needing to complete farm work in order to extend their working holiday visas.

One worker said her payslips had a different ABN and business name each week while another said she was underpaid.

A spokesperson for the Fair Work Ombudsman said improving workplace compliance in the horticulture industry, including among labour hire providers, remained a priority.

“All workers in Australia have the same rights regardless of citizenship or visa status,” the spokesperson said.

“We urge any workers who are concerned about their wages or entitlements to contact the Fair Work Ombudsman.”

Recall that in 2016 the Fair Work Ombudsman completed an inquiry into Australia’s backpacker visa scheme, which found that “many backpackers are being subjected to underpayment or non-payment, unlawful deductions, sexual harassment, unsafe working conditions and other forms of exploitation”.

The Senate report, entitled A National Disgrace: The Exploitation of Temporary Work Visa Holders, documented widespread abuse of Australia’s Working Holiday Maker visa program, which was “consistently reported to suffer widespread exploitation in the Australian workforce”.

The 2017 National Temporary Migrant Work Survey found that one in every seven temporary migrant fruit and vegetable pickers were paid $5 an hour or less, and a third $10 an hour or less.

In 2018, a group of academics jointly penned an article in Fairfax claiming that exploitation of temporary migrant farm workers is rife:

Australia already has more backpackers, and relies more strongly on them for horticultural work, than any country…

Unlike agricultural visas in New Zealand, Canada and the United States, and unlike Australia’s own Pacific seasonal worker program, there is no pre-approval of employers. Nor is there systematic ongoing regulation to ensure compliance with workplace laws…

Story after story after story have exposed exploitation on farms…

More “systemic exploitation” of migrant workers on Australia’s farms was exposed last year and this year.

Indeed, the Migrant Workers Taskforce’s 141-page report, released in March 2019, found that “wage underpayment is widespread and has become more entrenched over time”, with as many as half of all migrant workers exploited.

The reality is that we ran mass immigration into an economy with a large output gap (that is, too much supply), and stacked the joint with cheap, vulnerable foreign workers from backpackers to international students and the market did the rest. It was everywhere.

This the core of weak Australian wages and it will not stop until temporary and permanent immigration is cut to historic averages.