Up to one in six recent migrants are paid less than the minimum wage. Here’s why

From working 20 to 30 hours of unpaid overtime each week in one of Australia’s fanciest restaurants to picking fruit while being exposed to dangerous chemicals for less than $10 an hour, the underpayment of migrant workers is rife.

The Grattan Institute’s new report, Short-changed: How to stop the exploitation of migrant workers in Australia, show a broad pattern.

We’ve used two nationally representative Australian Bureau of Statistics surveys of employees and employers – Characteristics of Employment and Employee Earnings and Hours – to find out whether employees are paid below the national minimum hourly wage in Australia, currently $21.38 an hour or $26.73 an hour for casuals.

We estimate that recent migrants – those who arrived in Australia within the past five years – are twice as likely to be underpaid as migrants who have been in Australia for at least 10 years, and those born here.

Underpayment is widespread

In 2022, 5% to 16% of employed recent migrants were paid less than the national minimum wage. Between 1% and 8.5% of recent migrants were paid at least $3 less than the hourly minimum.

This compares with 3% to 9% of all employees in Australia being paid below the national minimum wage; with 0.5% to 4.5% paid at least $3 an hour less. These numbers are likely to under-represent the extent of underpayment because our analysis only counts those being paid less than the national minimum wage. It does not count cases where workers are underpaid against appropriate award rates, which typically pay more than the national minimum wage, penalty rates, or are not paid their superannuation. Factors contributing to exploitation Part of reason recent migrants are more likely to be underpaid is because they tend to work in industries where underpayment is more prevalent, such as hospitality and agriculture. For example, temporary visa holders account for nearly 20% of workers in hospitality, the industry with the highest reported rate of underpayment.