Australia’s 417 working visa system is in danger of becoming a “black market, exploited labour-force if settings remain the same”, with Asian backpackers most at risk, the Fair Work Ombudsman has found.
In a report released on Saturday morning, the Fair Work Ombudsman, Natalie James, found employers and intermediary agents were exploiting and under-paying backpackers staying in Australia on 417 visas.
Backpackers are required to do 88 days of paid work in a regional area, and provide documentary evidence, if they wish to stay for a second year under the visa.
“We surveyed 4000 417 visa holders, and as a result of that we know that 66 per cent of them - two in every three - feel that they are likely to be exploited by their employer, taken advantage of when they do the 88 days of regional work they’re required to do for their second visa,” Ms James told SBS News.
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“A lot of backpackers working had a positive experience, but we were very concerned that we did find many cases of either non-payment for work at all, underpayments, sham contracting and unlawful deductions from their wages for things like accommodation and transport.
“We also found that 59 per cent of them felt that they wouldn’t complain because they were concerned that the boss wouldn’t sign off on the paperwork for that second year visa so they could stay in Australia.”
Nearly 50 per cent of backpackers surveyed did not know their workplace rights in Australia and 35 per cent said they had not been paid the minimum wage for their work.
Another 28 per cent of visa holders reported not being paid for some or all of the work they undertook.
Asian backpackers were “especially vulnerable” to exploitation, with limited English language skills and a lack of understanding of Australian wages, the survey found.
They were more likely to have a low awareness of their workplace rights in Australia and were more likely to have money deducted from their pay for food or accommodation, without their agreement.
Asian backpackers were also more like to have paid an agent to secure work and to have paid more money to stay in Australia for a second year.
Ms James said incidents of “sexual harassment, unsafe working conditions and other forms of exploitation” were also identified as problems through the survey.
“In particular, the desire for a second-year 417 visa can drive vulnerable workers to agree to work for below minimum entitlements and in some circumstances, enter into potentially unsafe situations,” she said.
“The backpacker labour-force is vital to some industries associated with food production in regional areas but we are at risk of it being a black-market, exploited labour-force if the settings remain the same.”
More than 226,000 417 visas were granted in 2014-15, the majority going to visitors from Taiwan, United Kingdom and South Korea who worked mainly in the agriculture, forestry and fishing industries.
Through the survey, the ombudsman found “a significant number of instances” where 417 visas were being used to force “vulnerable workers to agree to ‘below minimum’ entitlement arrangements and potentially unsafe working environments”.
She also found a lack of regulation for those employing 417 workers and often substandard working conditions and accommodation.
The ombudsman recommended establishing a “federal-state, interagency working group” to examine the regulations and develop a compliance and enforcement model to protect visa holders and hold employers to account if they break the law.
“What we’re looking government and other stakeholders to do is to look at whether the settings around this visa are right,” Ms James said.
“We want to make sure that if an employer that refuses to sign off on the paperwork after that 88 days, that there’s some sort of punishment for that.
“We want to make sure that government is operating in a joined up way, in a co-ordinated way to make sure visa holders are aware of their rights and to make sure that employers are aware that there is strong enforcement action that is going to happen if they’re caught out engaging in this unscrupulous and exploitative behaviour.”
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