International students and backpackers know they are being underpaid when they work in Australia but few do anything about it, according to a hard hitting new report.

The study by the University of New South Wales and the University of Technology Sydney found that less than 10% recover their unpaid wages and much of this is due to a 'broken' system that makes it hard for them to do so.

Underpaid Worker

(By Leroy Harvey/​

The report draws on the first large scale national survey of temporary migrant workers, with 4,322 respondents from 107 countries working across all Australian states and territories and found that unpaid wages amount to over a billion dollars.

Previous work done by Bassina Farbenblum, a senior law lecturer at UNSW and Laurie Berg, a senior law lecturer at UTS found that most international students and backpackers are underpaid, with one in three earning about half the legal minimum wage.

The new report paints a bleak picture for the few who try to recover their unpaid wages. The study reported that for every 100 underpaid migrant workers, only three went to the Fair Work Ombudsman. Of those, well over half recovered nothing.

The authors conclude that for most migrant workers it is neither possible nor rational to try to claim their unpaid wages through the forums that currently exist. 'The system is broken. It is rational for most migrant workers to stay silent. The effort and risks of taking action aren't worth it, given the slim chance they'll get their wages back,' said Berg.

'There is a culture of impunity for wage theft in Australia. Unscrupulous employers continue to exploit migrant workers because they know they won't complain,' said Farbenblum.

The study dispels the popular assumption that few overseas workers would consider coming forward. In fact, though few had actually taken action, some 54% were open to trying to claim unpaid wages.

The study identified that not knowing what to do was the key barrier that prevented them from coming forward while more than a quarter were too frightened to speak up in case this affected their visa.

'The findings are deeply troubling but give cause for optimism, because they reveal a path forward. The study indicates that some of the most significant barriers to wage recovery can be practically addressed,' Berg pointed out.

The report concludes that if processes and support services are improved, and immigration safeguards strengthened, more migrant workers would report and seek redress for wage theft in the future.

The authors also pointed out that if Australia is to position itself as the destination of choice for international students and backpackers, reforms must be urgently implemented to prevent wage theft and enable migrant workers to report and recover unpaid wages.

They are urging the Australian Government, the education sector and businesses to act swiftly to implement change, including setting up a specialised forum for wage recovery, increase the services that give advice to overseas workers and introduce stronger punishment for those who repeatedly underpay overseas workers.