Employee underpayments are frequently cited as “wage theft”. But the workplace regulator is increasingly dealing with a more literal version: employers coercing their staff to pay back chunks of their wages. Those targeted are primarily migrants, particularly when the leverage of being able to withhold visa support guarantees their compliance — and often silence. And by the look of things, addressing it is not a government priority.
“Migrant workers tend to be more likely to fall prey to cash-back scams because they are often very desperate to find work,” associate professor in law at the University of Adelaide Joanna Howe told Crikey.
“For 457 visa holders, because migrant workers need their employer to be their migration sponsor as well, they are in a doubly vulnerable situation as their employer has additional leverage over them.”
“There’s certainly a lot more cases of cashback than are able to be investigated,” Howe said. “This is because of FWO’s limited resources, and many migrant workers don’t complain to the authorities.”
“There are always significant problems associated with tying employee visas to one employer — the pressure is on the migrant worker to find alternative employment and sponsorship if they want to leave the employer and remain in Australia,” Monash Uni associate professor of criminology Marie Segrave told Crikey. “This places significant power with the employer.”
“One case I’ve looked at, involving an engineer on the 457 visa, saw him have to give back a sizeable amount of his weekly salary to his employer in order to retain his job, and he was forced to do additional tasks too — like chauffeuring the boss’ son around, and assisting in other non-engineering, menial tasks which Australian workers of the same employer were not asked to do,” Howe said. “However, because this 457 visa holder wanted his employer to sponsor him for permanent residency he felt that he couldn’t do anything about the cash-back scam that he was coerced into.”
Cash-back scams came to national attention as one of the raft of issues faced by employees of 7-Eleven. Australian Council of Trade Unions president Ged Kearney told Crikey the issue was part of the broader primacy the Turnbull government gives business over workers.
“Workers in situations highlighted by the 7-Eleven scandal are being exploited and the insecurity of work is making it harder than ever for them to fight back,” she said.
The Fair Work Ombudsman has commenced four litigations relating to cash-back exploitation schemes, all in the last year and all involving visa-dependent employees. Most recently, a former Brisbane Coffee Club franchisee was fined $180,000 for (among many other things) requiring a cook (on a 457 visa) to repay $18,000 of his wages. But the Fair Work Act doesn’t treat this behaviour any differently to standard underpayments — a maximum fine of $54,000 (per contravention) for a corporate entity and $10,800 for an individual. A Fair Work Ombudsman spokesperson confirmed these were the same maximum penalties that applied for many contraventions that related to underpayment of minimum employee entitlements.
In the media release on the Coffee Club franchisee penalty, Fair Work Ombudsman Natalie James said she had been concerned about the use of cash-back arrangements and welcomed the “government’s commitment to strengthen laws to explicitly cover cash-back arrangements”. The Protecting Vulnerable Workers Bill was introduced into Parliament in March of this year and entered the Senate in early May.
“The government’s proposed bill is a step in the right direction, however the proposal to introduce a specific penalty relating to cash-back scams is unlikely to deter unscrupulous employers,” Howe said. “Those who wish to exploit migrant workers will continue to do so because the risk of detection is so minimal.”
“There needs to be a commitment to workplace exploitation full stop, and this can only be achieved by empowering temporary migrant employees. When we make it difficult for employees to move, the power lies with employers to exploit the worker in various ways because there are significant motivations for the migrant worker to remain in that job. This should extend to protecting unlawful migrant workers, who currently are assured protection and non-removal by the Department of Immigration and Border Protection on a case-by-case basis,” she said.
“Which is, clearly, not an assurance at all.”
Regardless of whether the Vulnerable Workers Bill is adequate, it does not appear to be a priority for the government, dumped from the legislative agenda for the last sitting week before the winter break, in subservience to budget-related legislation. Crikey understands the government intends to put it on the agenda when Parliament returns.