FEATURE REPORT
The Underpayment System: how employers underpay, exploit, and evade detection
Two-thirds of migrant workers in Australia are paid less than they are legally owed. Not by accident, but by design. This report presents the first national evidence that these practices cluster together into a single system of exploitation, and identifies where to intervene.
IN THEIR WORDS
Note: audio as example only. This section should be focused on whatever content we think is most compelling / powerful per report.
“I worked 60 hours a week but only got paid for 20. When I complained, my boss threatened to cancel my visa.” — Maria
“I knew I was being underpaid, but I stayed silent. I needed the job to support my family back home.” — Raj
“I worked 60 hours a week but only got paid for 20. When I complained, my boss threatened to cancel my visa.” — Maria “I knew I was being underpaid, but I stayed silent. I needed the job to support my family back home.” — Raj
"My employer kept my passport. I felt trapped—like I couldn't leave even though the conditions were terrible." — Laura
"They told me if I reported them, I'd be deported. I believed them for two years." — Ahmed
"My employer kept my passport. I felt trapped—like I couldn't leave even though the conditions were terrible." — Laura "They told me if I reported them, I'd be deported. I believed them for two years." — Ahmed
“I was studying full-time and working nights. My boss knew the visa rules and paid me cash under the table—always less than minimum wage.” — Sofia
“When I finally spoke up about missing wages, I found out I wasn't alone. Six of us were being treated the same way.” — Mike
“I was studying full-time and working nights. My boss knew the visa rules and paid me cash under the table—always less than minimum wage.” — Sofia “When I finally spoke up about missing wages, I found out I wasn't alone. Six of us were being treated the same way.” — Mike
THE SCALE OF THE SYSTEM
2 in 3
workers on temporary visas are paid less than their legal entitlement
$64.8m
per week: estimated annual cost of underpaying international students alone
4x the rate
of ABN use among migrant workers compared to the general workforce
This isn't a gap in the system. It is the system. Employers give themselves power over workers on visas by using insecure employment structures, then abuse that power to underpay them. And they take deliberate steps to cover their tracks.
Our data shows, for the first time, how underpayment, insecure employment structures and noncompliant employer practices cluster together into a single system of exploitation.
Employers have adapted. Since our 2016 study, cash-in-hand payments have fallen, but ABN structures and fraudulent payslips have taken their place. The vast majority of workers on ABNs were in industries where this was probably sham contracting: businesses classifying employees as contractors to evade minimum wage obligations and regulator oversight.
The worse the underpayment, the more violations clustered alongside it. Denied super, wage deductions, and practices that are indicators of modern slavery. Two-thirds of migrant employees received no payslips at all, or payslips that disguised their underpayment. The system conceals itself by design.
The government's first-term reforms were a necessary start, but employer strategies have evolved faster than the regulatory response. These enforcement gaps distort competition: employers who exploit people on visas gain unfair advantages over businesses that comply. Business groups and unions both want these loopholes closed.
The full report maps the system in detail and sets out seven recommendations for reform.
FIND WHAT YOU NEED
Are you a worker on a temporary visa?
Understand your workplace rights and how to access support if you've been underpaid or exploited.
Covering the issue?
Access our latest research, expert commentary, and media materials.
Organising for worker justice?
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UTS Law Faculty and UNSW Faculty of Law & Justice are proud supporters of the Migrant Justice Institute. MJI is a charity registered with ACNC. ABN 84654507758.