As part of the Government’s review of Australia’s Migration Program, the Government is aiming to provide greater protections for migrants and reform the policy settings that drive exploitation and enforce workplace rights.
As part of the Government’s review of Australia’s Migration Program, Minister O’Neil, Minister of Home Affairs, told the National Press Club on 27 April 2023 that the Government would provide greater protections for all migrants and, therefore, local workers and reform the policy settings that drive exploitation and enforce workplace rights.
The Fair Work Act applies to all workers regardless of whether they are an Australian citizen or permanent resident, a New Zealand citizen or a temporary Visa holder.
The Fair Work Ombudsman (FWO) continues to prosecute both big and small employers who underpay workers.
All employers should check the Visa status of a worker or prospective worker to ensure that they are lawfully in Australia and have the right to work in Australia, and if they do ensure that they comply with workplace rights.
Obligations of employers and company directors: data matching
There are numerous laws that employers and company directors must comply with, some of which result in personal liability in the event of breach.
With all Directors now having a Director Identity Number (DIN) and Single Touch Payroll, the Australian Taxation Office (ATO) has real time payroll data that allows the opportunity to quickly identify and act on any anomalies or non-compliance.
In a digital age, the Department of Home Affairs and the ATO Data Matching protocols provide extensive data to the ATO on Visa holders, employers and migration agents.
The subclass 482 Visa Program, includes data on the business, the nominated position, the workforce details, the salary arrangements, and the like.
Both the Department and the ATO collect, record, store and use data which is exchanged for compliance, administrative and other purposes. Data is matched electronically, and where there is a match, the ATO will return income and employment data to the Department.
The ATO provides the Department with the Tax File Numbers (TFN) regarding temporary and permanent skilled visas, including across subclasses 124, 132, 186, 187, 188, 189, 190, 457, 482, 485, 489, 858, 877, 888, 890, 891, 892 and 893 visas.
The TFN’s enable the Department to identify sponsors and Visa holders who have not complied with their Visa conditions.
Data is shared between prescribed agencies, including the Department and the Australian Border Force, as the independent operational enforcement arm of the Department to identify instances of non-compliance and undertake compliance activity.
Data shared annually enables the Department and the Australian Border Force to identify whether approved or former approved business sponsors are complying with their sponsorship obligations. This includes whether the Visa holder is being paid under the authorised nomination, is working in the approved occupation, and whether the visa holder is complying with their visa conditions.
Data analysis and matching enable the Minister of Home Affairs to publish information, including personal information about an approved sponsor or former sponsor who has failed to meet their sponsorship obligations. This includes the business name or trading name, the ABN or individuals within the organisation, the breached sponsorship obligations, and any other sanctions or subsequent decisions to waive the sanction.
The ATO and the Department also share personal data on Visa holders, including the date of birth, the Visa and tax and related data.
Migration Amendment (Protecting Migrant Workers) Bill 2021
The Migration Act includes extensive discretionary powers to strengthen the sanctions against employer sponsors who breach their obligations under the subclass 457/482 visa programs.
These provisions place greater responsibilities on boards, directors, and senior managers to create a culture requiring compliance. With an increasing reliance on personal liability of directors and executive officers, the level of regulatory scrutiny and enforcement activity is likely to increase substantially.
The Senate Legal and Constitutional Affairs Legislation Committee published its report in relation to its enquiry into the Migration Amendment (Protecting Migrant Workers) Bill 2021, which if enacted would amend the Migration Act 1958 (Commonwealth) to:
- Create offences and civil penalties when a person coerces, exerts undue influence or undue pressure on a non-citizen to a work arrangement, which is in breach of Visa conditions or to avoid an adverse immigration outcome.
- Create a new power for the Minister of Home Affairs to declare a person who has contravened a work-related requirement involving migrants to be a “prohibited employer” (prohibited employer declaration power) and civil penalties if a “prohibited employer” employs additional non-citizens during the period of the declaration
- Provide for civil penalties when a person allows or refers a non-citizen for work without determining whether they have permission to work by using information from a prescribed computer system
- Introduce certain regulatory functions to enforce the work-related offences and provisions in the Migration Act.
There has been much comment on the Bill which is yet to become law.
Fair Work Ombudsman prosecutions against Company Directors
The FWO has filed 126 litigations involving Visa holders and secured more than $13.4 million in court ordered penalties in Visa holder litigations, in the last five full financial years.
Recent reports from the FWO’s website continue to evidence cases of underpayment including of minimum wage entitlements:
- Cleaning company: received $124,186 in penalties after being caught again underpaying two casual cleaners who were international students their minimum entitlements and loadings and provided false records. The former manager admitted breaching workplace laws by underpaying the two cleaners and failing to issue payslips. The company and its former manager were found to have knowingly or recklessly produced false or misleading documents to a Fair Work Inspector misclassifying the workers as independent contractors.
- Hairdressing salon: received $291,000 in penalties and back payment orders for sponsoring a South Korean national under the subclass 457 skilled work Visa to work as a hairdresser but failed to pay minimum entitlements and required the employee to make unlawful cashback payments. The worker had been underpaid more than $49,000 in minimum wages, a tool allowance, overtime and penalty rates for weekend and public holiday work under the Hair and Beauty Industry Award 2010 and the Fair Work Acts National Employment Standards. The worker was also unlawfully required to repay a total of $105,609 of her wages and entitlements.
- Café: fined $115,603 for underpaying staff and breaching recordkeeping and payslip laws, including making false time and wage records. During the investigation, the company sole director was found to have provided a total of 66 false and misleading records to Fair Work inspectors that overstated the rates the two workers were paid. He had previously been put on notice by the Ombudsman regarding his obligations under the workplace laws during the previous investigation.
The cases against Super Retail Group, David Jones, Country Road, Woolworths and others for underpayment of work entitlements have resulted in significant multi-million-dollar penalties.
With the December 2022 change in the definition of a casual contractor, employers should undertake due diligence to ensure payroll compliance and avoid the significant consequences of breach.
Wage theft is the deliberate, intentional underpayment of wages and superannuation entitlements.
With the complexities of Workplace Relations laws, many Awards, and the Modern Slavery legislation reporting requirements, including regarding an entity supply chain, the level of regulatory scrutiny and enforcement continues to increase substantially.
In the digital age characterised by interconnected relationships between technology, data and people, businesses continue to collect data and data is constantly provided to Government and third parties.
The collection, interpretation and analysis of data can drive effective decision-making.
The collection of data can also result in growing pressures and ever shifting focus on employers and directors to ensure a culture of regulatory compliance. This includes checking the Visa status and work rights of employees and prospective employees, and meeting workplace rights.
In an increasingly compliance-based environment, all businesses need better governance standards and risk oversight by adopting a broader enterprise risk management approach where risk, including workplace rights, is embedded in all aspects of business planning and business operations.
The Australian Government has committed to implementing the recommendation of the Migrant Workers’ Taskforce to introduce a criminal offence for the most severe forms of exploitative conduct and to increase penalties for infringements of wage exploitation-related provisions of the Fair Work Act.
Let’s see whether the Migration Amendment (Protecting Migrant Workers) Bill, 2021 becomes law.
Submissions on the criminalising wage theft consultation paper, close Friday, 12 May 2023.
BDO Migration Services
BDO Migration Services, as leaders in the field are focused on providing the latest advice and assistance on all aspects of Australia’s complex immigration laws and policies.
As trusted advisors, please contact Maria Jockel, Global and National Immigration Leader, Legal Principal and Accredited Specialist in Immigration Law; or Rebecca Thomson, Principal Lawyer, BDO Migration Services, with any enquiries.
Disclaimer: This information is provided as a guide only and it has been written in general terms and should be seen as a broad guidance only. This information cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information without obtaining specific professional advice. ©May 2023 BDO Migration Services. All rights reserved.