Migrant worker underpayment could lead to jail time

By Nick Hall | 08 Mar 2019 View comments

Employers who deliberately engage in employee wage fraud may face jail time under a Morrison government plan to target migrant worker underpayment and exploitation.

Kelly O’Dwyer, Industrial Relations Minister gave in-principle support to all 22 recommendations outlined in the Migrant Workers’ Taskforce report released on Thursday.

“The exploitation of workers in Australian workplaces is not only illegal, it harms individuals, undercuts law-abiding employers and reflects poorly on Australia’s international reputation,” O’Dwyer said.

“Only the most serious and egregious cases would be subject to criminal penalties, not employers that accidentally or inadvertently do the wrong thing.”

The inquiry was sparked by revelations of migrant worker underpayment by franchisees of well-known chains 7-Eleven and Caltex.

Migrant worker underpayment

Just last week, a former Subway franchisee in Sydney was ordered to pay over $65,000 in penalties for the exploitation of a Chinese migrant worker. The reports have further strengthened support for the coalition’s introduction of criminal charges for deliberate and serious breaches of the Fair Work Act.

Innes Willox, Ai Group chief executive disagreed however, suggesting that criminal penalties for industrial law breaches would stifle investment.

“Implementing criminal penalties for wage underpayments would discourage investment, entrepreneurship and employment growth,” Willox said in an interview with AAP.

But if Kate Carnell, Australian Small Business and Family Enterprise Ombudsman is to be believed, stricter regulation regarding migrant worker underpayment and exploitation would not impact the wealth of small business owners already doing the right thing by their employees.

“Many small businesses rely on a flexible workforce and most are doing the right thing; paying award wages or sometimes more,” Carnell said.

“Targeting those who undercut honest small businesses should help level the playing field. However, we need to ensure that what is put in place doesn’t further complicate the hiring process for small businesses.”

Acknowledging the struggles that many migrant workers face, Carnell also voiced her support for further educational initiatives.

“The migrant workforce is important to small businesses in Australia, particularly in regional areas,” Carnell said.

“We are encouraged that recommendations 15 and 16 calls on education providers to provide potential immigrants of their workplace rights before reaching Australia.”

“This knowledge would empower these employees to seek out honest small business employers.”

It may be a while before the migrant worker underpayment and exploitation recommendations become law however, with the proposed updates unlikely to take effect before the upcoming federal election.