Workers in Australia owed at least $1 billion in lost pay

THE first time Carlos* realised something was up with his pay, the cleaning company he worked for said he would have to wait another month to get his wages as he hadn’t sent his invoice in on time. It wasn’t true.

The second time they said there was an issue with the mail which had delayed the payment.

Eventually, even as he kept working, the excuses dried up altogether. As did Carlos’ wages.

All in all, he said he is owed around $10,000 from the Sydney based firm. After months of legal wrangling, when he should have been studying, he managed to claw back just one twentieth of the money he was owed.

“It’s shocking and it’s crazy. There’s a word for working with no payment — it’s called slavery and it shouldn’t happen in Australia,” Carlos told

Carlos is one of the thousands of workers in Australia who are annually dudded out of around $1 billion in wages by unscrupulous firms.

A new report, released today from University of Technology Sydney (UTS) and the University of New South Wales, said wage theft is rife among international students and backpackers who are unfamiliar with Australian law, unaware of their rights and fearful of being deported.

“The system is broken,” UTS senior law lecturer Laurie Berg, co-author of the report, called Wage Theft in Silence, said.

“It is rational for most workers to stay silent. The effort and risks of taking action aren’t worth it, given the slim chance they’ll get their wages back.”

The authors, who spoke with more than 4000 respondents hailing from 107 countries working all across Australia, found at least one in three had not been paid the wages they were legally entitled to.

Fewer than one in 10 migrant workers took action to recover unpaid wages. While of the only three out of 100 who approached employment watchdog the Fair Work Ombudsman (FWO) to seek redress, well over half of those received nothing.

Pakistani and Taiwanese workers were the most proactive in trying to claim unpaid wages, while vast majority of the Brits, Irish and Americans made no attempt to get hold of the cash they were legally owed.

Temporary migrant workers make up 11 per cent of the Australian workforce.

Backpackers on working holiday visas can work full time but only for up to six months with one employer while international students’ work hours must not exceed 40 per fortnight.

Many victims of wage theft worked relatively low paid roles in hospitality, cleaning and construction. The minimum wage at the time of the survey was $17.70 but as most students and backpackers worked casually they should have received a 25 per cent loading bringing the hourly rate up to around $23 depending on the industry.

Yet, 30 per cent of survey participants earned $12 per hour or less in their lowest paid job.


In May, Victorian Premier Daniel Andrews said the government would look to impose jail sentences of up to 10 years for employers who withheld wages whether that was a convenience store owner or a celebrity chef.

Carlos, from Colombia, started working with a Sydney firm in May 2014 cleaning apartments while he studied business English.

“It was tiring manual work, cleaning windows, kitchens and toilets,” he said.

He found the job on website Gumtree and the pay was “pretty good”, he said, with the extra loading. But what worried him was the pay cycle which was a full month despite him only working part time.

For three months he was paid on time and in full and then, the next month, nothing dropped into his bank account.

He was told he would have to wait another month to be paid.

“So I re-sent the invoice and they did pay us the next month. But only for a single month not the two I was now owed,” he said.

The excuses began to come in thick and fast leaving Carlos in a terrible position.

“If you were getting paid every week, after four times you could make the decision to leave. But a month is a much bigger time period,” he said.

He feared not receiving any of his rapidly accruing backpay if he walked out before the next pay date. But he had to work another job just to manage his bills.


After the amount Carlos was owed ticked over $10,000 he sought advice from the Redfern Legal Centre, in inner city Sydney.

“You do all the right things; you follow the rules and you do all that work and in the end, you have nothing because it’s a flawed system,” he said.

At one point he considered selling the company van he had the keys too but was told that would be an even bigger crime. Yet there seems to have been little consequence for the crime of not being paid.

“The system is so complex for an international student. They don’t speak the language so it’s hard to lodge a complaint and you don’t know what your rights are,” he said.

Some employees pressured students and backpackers into working more than their legally allowed hours and then refused to pay them for those hours, he said.

Carlos won his case, but it was a Pyrrhic victory: “All I received from the $10,000 I was owed was $56 because that was all the money the owner had left in the back account. Bank accounts can be emptied.”


The report’s authors said the fear of being sacked or deported and the sheer amount of time and effort required to claw back stolen wages meant few workers managed to get hold of what they were owed.

“The findings are deeply troubling but give cause for optimism, because they reveal a path forward,” Ms Berg said.

The report recommends the FWO create a dedicated migrant workers team and that a “firewall” be created between that organisation and the Department of Home Affairs so workers wouldn’t be deported if they had unwittingly breached their working hours and, as such, their visa conditions.

Colleges and universities should also step up and provide advice to their students so they could better navigate the system and know their rights.

Australia’s booming international education industry, that brings in $19bn in the country’s coffers a year, could be under threat as students chose countries where they won’t get ripped off.

Carlos said it may already be too late.

“Students know Australian companies underpay. The Government should make the process (of recovering wages) quicker and easier because at the moment you do everything but there is no response.

“The message to companies is they can get away with these kinds of practices because the law has no teeth.” contacted the office of the Minister for Jobs and Industrial Relations Kelly O’Dwyer.

*Carlos’ name has been changed at his request.

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