Recent research puts migrant worker underpayment in Australia in the billions. Here are four practical checks businesses can make to strengthen compliance and give migrant workers greater clarity about their employment rights.

A recent report from the Migrant Justice Institute has highlighted the scale of underpayment among migrant workers, with a survey of 10,000 workers finding that two-thirds had been paid less than they were owed under the Fair Work Act.

For international students alone, the report estimates that underpayment amounts to around $61 million each week, or $3.18 billion a year. 

Underpayment cases involving migrant workers often show up in the courts; in late July, an Australian business was accused of underpaying a single migrant worker $93,000. 

While the report identifies cases where employers deliberately underpay migrant workers or attempt to disguise non-compliance, it also points to broader factors that can make migrant workers more vulnerable to workplace problems and less likely to report them.

These factors can create compliance risks even where deliberate exploitation is not the issue, particularly when employers and employees are navigating the intersection of migration and employment requirements.

One of the key issues is that temporary visa arrangements can contribute to an imbalance in the employment relationship, says Zefy Souvlakis, Partner at Ethos Migration Lawyers.

“Temporary visa holders are more reliant on their employers,” she says. “There’s that perception that if they were to report [an underpayment or other issue], that might have a flow-on effect on their visa status, and that increases the likelihood of them not reporting.”

This means problems within the employment relationship may not always be easily identified through an organisation’s usual workplace processes.

Below, Souvlakis explains how the migration system has evolved in response to these concerns, and where employers can strengthen their processes to reduce compliance risks and better support migrant workers.

The evolving legal landscape around migration employment

Recent changes to Australia’s migration system have given some temporary visa holders more flexibility, says Souvlakis. One of the most notable changes was the introduction of the Skills in Demand visa in 2024.

“Holders [of that visa] are permitted to change employers and have their previous period of employment with a sponsor count towards eligibility for permanent residency,” she says. “They also have a longer period of time to find a new employer to take over their sponsorship. And during that time, they’re permitted to work to support themselves.

“It’s definitely a positive change, but it’s certainly not directly addressing other systemic issues that we come across.”

Giving workers greater freedom to change employers does not eliminate the compliance risks that can arise during their day-to-day employment, she explains.

One area where employers can sometimes slip up is overlooking the fact that migrant workers remain entitled to the same minimum workplace protections as other Australian employees under the National Employment Standards.

This means ensuring that remuneration, classifications, overtime arrangements and termination processes comply with workplace laws independently of the employee’s visa status.

The introduction of the Workplace Justice Visa in 2024 created a new pathway for eligible migrant workers who need to remain in Australia to pursue a workplace claim.

“However, there is still the issue that visa holders are less likely to report – sometimes because [they don’t] have a full understanding of their rights, and very often they are in a more vulnerable financial position where they might not be able to afford legal advice.”

Alongside these reforms, regulators are turning more attention to how existing workplace and migration rules are enforced.

The Department has allocated greater resources to monitoring and compliance, alongside strengthened legislative powers. Employers should expect greater scrutiny of sponsorship and migration compliance and therefore ensure their internal processes are appropriately documented and regularly reviewed.

“In the next few years, I anticipate that there will be more cross referencing of information between departments, the ATO with the Department of Home Affairs and the ABF, which will naturally expose more employers to risk.” – Zefy Souvlakis, Partner at Ethos Migration Lawyers

Four checks for employers

Many of the factors contributing to migrant worker vulnerability sit beyond the remit of individual employers and HR, says Souvlakis.

“The issues are not necessarily such that they can be easily dealt with at a people and culture level… The government still has a fair bit of work to align the interests of employers as well as migrant workers,” she says.

However, she says there are several steps HR can take to strengthen internal processes, reduce compliance risks and give migrant workers greater clarity about their rights and employment arrangements.

1. Ensure alignment between HR, payroll and managers

Responsibility for managing migrant workers often crosses multiple parts of an organisation, from recruitment and HR through to payroll and line management.

Training can help ensure that those involved understand both the worker’s rights and the organisation’s obligations, particularly where employment and migration requirements intersect.

Alignment between functions will become increasingly important as enforcement becomes more data-driven, says Souvlakis.

“In the next few years, I anticipate that there will be more cross referencing of information between departments, the ATO with the Department of Home Affairs and the ABF, which will naturally expose more employers to risk.”

2. Communicate rights clearly

Providing migrant workers with clear information about their workplace rights can also help reduce uncertainty around the employment relationship.

This is particularly relevant given the Migrant Justice Institute report’s recommendation for greater investment in worker rights education.

“Having a clear understanding of obligations from the outset and not retrospectively makes all the difference,” says Souvlakis. 

“[Communicating] clear expectations towards migrant workers is not only a sound legal approach, but it’s also a commercially sound approach. It allows for more clarity and more certainty, and overall that leads to better outcomes on both sides.”

3. Check that duties remain aligned

An employee’s responsibilities can evolve over time, making it important to consider whether changes to their role have implications for their visa arrangements.

HR teams should therefore ensure there is a process for identifying when significant changes to an employee’s duties or position require migration advice.

4. Review payroll

The Migrant Justice Institute report’s findings make payroll a key area for organisations to review, particularly where migrant workers are employed across different roles, classifications or working arrangements.

Souvlakis recommends that payroll reviews form part of a wider programme of regular checks, alongside reviews of employees’ visa arrangements.

“[It’s important to] take a proactive approach in potential issues, because more often than not, a retrospective find is much harder to deal with,” she says.

While HR cannot resolve every vulnerability in the migration system, stronger internal governance can help prevent avoidable compliance gaps and give migrant workers more certainty about their rights and employment arrangements.

All information, content and materials available on this site are for general informational purposes only. The contents of this article do not constitute legal advice and should not be relied upon as such.

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