Since the incident at Fun Tea in early February, where a 39-year-old man was arrested and charged with assault, more workers on student and working holiday visas who suspect they're being underpaid, are seeking help.
And, they’re not just relying on the Fair Work Ombudsman.
Two labour rights organisations in Adelaide told SBS Chinese they have seen a rise in enquiries from migrant workers due to an increase in awareness of underpayment in the casual workforce.
“[The bubble tea incident] took the discussion of wage theft to a new level,” says Meng, an advocacy officer at the Working Women’s Centre in Adelaide, which provides free legal advice and consultation services to workers.
Highlights:
- Hourly rates in some Chinese businesses in South Australia are $12 an hour and can go as low as $3 to $5 an hour
- During 2019-20, 46 per cent of the anonymous reports across Australia to Fair Work Australia were made in traditional or simplified Chinese
- 18 per cent of all South Australian workers are underpaid, according to expert analysis
- Experts are calling for the penalties for employers who deliberately underpay their workers to be increased
Over the past 12 months, the centre alone has assisted more than 50 Chinese-speaking victims of wage theft.
Meng says Chinese speakers have reported more instances of wage theft to the organisation than any other non-English speaking group.
Before the pandemic, Adelaide was drawing tens of thousands of international students, who filled job vacancies for local businesses and provided students – the majority from Asia - with a source of income.
A man was charged over the altercation at the Fun Tea store in Adelaide's Chinatown and will face court in August. Source: SBS Chinese
A vast number have since left Australia, and out of those who chose to stay, more than 500 have joined the SA Labour Info Hub, a non-profit organisation set up in April last year to support international students in Adelaide.
The organisation’s founder Jackie Chen says migrant workers who are being underpaid often receive threats from employers that they will be reported to the immigration department which will lead to the cancellation of their visas.
Workers' rights advocates tell SBS Chinese that the word is “finally getting around” to victims, particularly in the Asian community, that free legal advice is available and they “don’t need to suffer in silence”.
A number of victims have told this program they have already found jobs that pay them the correct wage after they sought legal advice.
"Don't be afraid to defend your rights," one anonymous victim said.
After completing her studies in 2020, Meng interviewed for five jobs in Adelaide's CBD back-to-back with employers who initially promised her a legitimate salary.
By the second interview, however, all employers had changed their offer substantially.
“They told me that they can only pay me $10 to $12 per hour. And this is totally normal in the industry here.
“They told me that I had to first undertake a three-month unpaid internship. Then they would consider if my skills were ‘fully developed’ enough to offer me a contract.”
Meng said she was told by the employers:
The frontage of Chinatown in Adelaide. Source: SBS Chinese
If you want to stay here, this is the price you must pay. If you don’t want the job, it doesn’t have to be you. There are a hundred other international students waiting.
Angered by these experiences, she decided to help other wage theft victims after being told for the fifth time that she would only be paid $12 an hour.
The under the Fair Work Act for anyone who is not covered by an industrial award or registered agreement is $20.33 an hour, or around $772.6 per week.
According to advocates, the hourly rate in some Chinese businesses in South Australia is around $12 an hour.
Push for tougher laws
Momentum has also been building for calls to impose harsher penalties for wage theft in South Australia.
In Australia, the penalties differ from state to state for any business that underpays its staff.
, employers who dishonestly withhold wages, superannuation or other employee entitlements, can face fines of up to $198,264 or up to 10 years in jail for individuals and a fine of up to $991,320 for companies.
New South Wales introduced tough new laws in 2021 designed to crack down on businesses who avoid their payroll tax obligations on instances of wage theft.
Under the laws, employers that fail to keep records required to determine tax liabilities, or fail to produce those records to Revenue NSW when requested, face potential penalties of $27,500.
In , employers engaging in deliberate wage theft from their employees face the risk of up to 10 years imprisonment.
Workers' rights advocates in South Australia are fighting for similar laws to be passed in their state.
SBS Chinese has even heard first-hand of workers being paid between $3 to $5 per hour.
On May 19, SA Labour Info Hub held a rally in front of the South Australian Parliament to urge MPs to take action on wage theft in South Australia.
Meng believes that criminalising wage theft is an important step, but it alone may not be enough.
She is calling for coordination between parties and for each of them to take responsibility for the issue.
"Universities should take responsibility for educating international students about their rights at work, unions need to be given more power, businesses should be educated to be more law-abiding," she said.
In December, the federal government announced .
Tougher criminal and civil penalties on employers under new laws to crack down on serious wage theft were proposed.
Then the Morrison government sensationally in March this year.
Edward Cavanough of the McKell Institute, an Australian public policy institute, tells SBS Chinese: "I really worry about having a country where we bring in all of these workers from overseas, underpay them, exploit them, abuse them, and then send them back to the rest of the world.”
He fears that the “ultimate victims" of inaction on wage theft will not only be migrant workers, but all of Australia, because it is dependent on its international reputation to recover from the pandemic.
"It's a problem for all of us because it puts the 'handbrake' on economic activity. We should be getting wage theft fixed, and I think that helps everybody.”
‘Chinese circle’, escape it, or change it?
One business operator from the Chinese community in Adelaide’s Chinatown remembers her own hardships in the workplace as a new migrant.
“When I came here in 1983, I was also paid very little for the work I did,” says Irena Zhang, owner of the International Food Plaza.
“If the wage is too low, you don’t have to accept it.”
Though wage arrears and wage deductions are not limited to Chinese companies, it has served as a business model for decades, she said.
Predatory business models, the practice of underpaying workers to price out competitors, is said to be widespread in Australia.
described how rife this practice is and how it is used to exploit temporary migrants in Australia, including students or working holidaymakers.
“The rates of underpayment and often intentional underpayment are just extraordinary,” Mr Cavanough says.
“We've done analyses specific to South Australia, where we found that about 18 per cent of all workers in the state who are routinely getting underpaid, and that's based on the available data.
“It's become so common that it's almost serving as a business model. That's economy-wide.”
Migrant workers stuck on low pay have been slowly breaking out of the so-called ‘Chinese circle’ with increased awareness of the system’s problems and their wage entitlements.
Wage theft victim, Xiao An* said other victims like her are becoming more outspoken about their stories, "which [has] helped me to understand that many employers are 'paper tigers' and they will cave in when the legal professionals get involved”.
Other victims, like Xiao Wang*, suggest they’ll take the matter further by not simply getting out of the ‘Chinese circle’ but change the “unhealthy and unjust” culture.
Despite the awareness growing around wage theft in Chinese communities, some migrant workers are allegedly still being exploited by their employers.
SBS Chinese contacted a number of underpaid employees who declined to be interviewed due to fears that if they spoke up, they would risk losing their jobs and jeopardise their visas or future visas.
“Nothing has changed since the Fun Tea incident,” says Stephen*.
“All the employees I know, who earn cash-in-hand in Adelaide, haven’t had their wages increased.”
Stephen said employers are refusing to withhold tax or offer any worker protection.
“They only ask for your ABN. They won’t give you your super, there’s no annual leave, no compensation for injuries, no work insurance,” he said.
Underpayment is said to still be an ongoing problem despite the nation’s fair work watchdog detecting high levels of non-compliance with minimum pay standards and penalty rates in Adelaide’s Chinatown precinct in April.
"You have to believe that you deserve better," Meng says, hoping her message will resonate with more people.
Steering away from the usual complaint process
In 2019-20, 46 per cent of all anonymous reports across the country to Fair Work Australia were made in traditional or simplified Chinese.
However, not all experiences dealing with the Ombudsman have been straightforward or even pleasant, according to alleged victims.
Xiao Wang said that she was left with the sense that Fair Work representatives “lacked empathy”, which made her give up following through with her complaint.
“They are passive and don't ask you about your situation," she said.
Another victim, Leo*, contacted the Ombudsman to make them aware that she was receiving $12 –15 per hour at a sushi chain in Adelaide for almost two years and missed out on penalty rates on weekends and public holidays.
She describes that her report had got “lost in a shuffle” and wasn’t investigated properly.
The Working Women’s Centre said there was no quick way to defend rights.
"Some may just give up halfway … Many people are full-time students and work part-time as a side job, so they don't have the spare time and energy to defend their rights," Meng said.
When SBS Chinese contacted the Fair Work Ombudsman about their investigations into anonymous reports, a spokesperson said: “We continue to use the intelligence gathered from anonymous reports … and prioritises matters that involve migrant workers.”
In 2019-2020, the Ombudsman stated that 44 per cent of the matters put to court involved workers who held visas, and the total amount recovered for visa holders was $1.7 million.
“We also secured nearly $3 million in court-awarded penalties through litigations involving visa holders,” the spokesperson said.
Mr Cavanough believes the Ombudsman has done all it can with its authority and resources, and the crux of the matter is that it has been given little power to issue its serious violation orders to employers.
“What they have is like a toothless tiger,” he said.
“What we need is to criminalise wage theft nationwide so that when the Fair Work Ombudsman can refer it to criminal proceedings whenever they identify these types of incidents.”
How is Australia trying to solve the problem?
Since 2019, Fair Work Australia has translated information pages of their into simplified Chinese to inform Chinese migrants of their working rights and how to proceed if they are victims of wage theft.
Following the Fun Tea incident in February, the regulator did act after receiving intelligence indicating potential breaches of workplace laws by some businesses in the area.
But is this enough?
In 2017, the Fair Work Act included the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017, which introduced greater penalties for those found guilty of wage theft.
Since 2018, the Parliament of has been investigating the issue, including the Fun Tea incident in 2021.
The investigation explores the reasons why wage theft is occurring, which may lead to recommendations about the current regulatory framework and practices.
South Australian Greens MP Tammy Franks argued that while the Ombudsman completed 26,917 requests for assistance and recovered more than $30.6 million during the 2016-17 financial year, only 55, or 0.2 per cent, of those requests went to court.
“While the Fair Work Ombudsman can enforce compliance and penalties, compelling employers to pay is far from easy, revealing how little power the Ombudsman actually holds,” Mr Franks said in the committee’s interim report.
Irene Pnevmatikos, the chairperson of the Wage Theft Committee in South Australia, told SBS Chinese: “The penalties for employers who continually and deliberately underpay their workers need to increase and we need to streamline court processes to enable workers to pursue underpayment of claims.”
In 2018, an Act was passed in parliament which was widely seen as the Australian government taking steps to tackle modern slavery.
However only businesses with an annual turnover of $100 million need to outline their efforts to ensure their supply chains do not involve modern slavery, according to the Act.
The business perspective
While much of the issue of underpayment in South Australia has been focused on Chinese businesses, workers' rights advocates and Chinese business operators said the problem isn’t isolated.
“It happens in every Australian community. Every multicultural business faces the same issue,” says George Chin, former president of the Chinatown Association in Adelaide and business operator of a lottery kiosk in the Chinatown precinct.
“The [Fun Tea] assault shouldn’t have happened. The fact that it did and went viral ... in Chinatown, has taken a huge toll on us.”
The 71-year-old was previously involved with Study Adelaide, to attract more international students to South Australia.
George Chin Source: SBS Chinese
The hundreds of businesses operated by Chinese Australians in Adelaide’s Chinatown are deeply reliant on the international student workforce, Mr Chin said.
“We had almost 30,000 international students in our local universities here in 2019. Now there are only a few thousand.
“Without their support, the impact on our economy is huge.”
Businesswoman Irena Zhang said starting a small business is very difficult, which was the main reason why some businesses choose to pay below the minimum wage.
“It is harder for the catering industry if all the employees are paid according to the legal wages, regardless of whether they are experienced or not,” she said.
While experts want penalties for employers who continually and deliberately underpay their workers to increase, Mr Chin believes all business owners should adhere to the legal payment amounts.
Irena Zhang runs her own business in Adelaide. Source: SBS Chinese
He also emphasised that underpayment does not only exist in Chinese businesses but also happens in other communities.
“We are all here to do business. It is undeniable that we all should abide by the government-mandated salaries to pay our employees,” he says.
The Working Women's Centre SA Inc is also trying to pass down the same information.
"We don't want to link this issue to the problem of the Chinese communities or their bad habits," Meng said.
"Wage theft is not unique to the Chinese communities, it is a very common phenomenon in both small and large businesses across Australia."
She believes that one of the key reasons temporary visa holders, including international students, are frequently the "protagonists" of wage theft stories, in addition to their limited English language skills, is that they are often not adequately educated about their work rights and lack quick access to avenues to assert their rights.
The Ombudsman spokesperson told SBS Chinese that 50 per cent of lawsuits filed in 2019-2020 involve the fast food, restaurant, and cafe industries, which employ many migrant workers.
The spokesperson said it had "secured more than $1.8 million in court penalties against employers in the sector”.
‘Beware of your visa being cancelled’
Xiao Wang, a Chinese student, worked for two businesses in Adelaide and was paid between $12 and $15 per hour.
"The bosses would say in all sorts of ways that it wasn't easy to run a business, and emphasised the Chinese cultural idea of conflict avoidance," she said.
"They also devalue you, saying that you are only worth this money. They tell you that if they sue them and the company closes down, you would never find a new job."
It's instances like this that concern policy experts such as Mr Cavanough, who raises the key question: how will they describe Australia?
“It won't be one of the beaches and pretty and fun. It'll be a much darker story. I think we need to think about this,” he reflects.
Not all cases end unrectified and stories getting out about underpaid workers are slowly, but surely, getting out into the migrant workforce.
After working for a wine company for five months in 2019, Xiao An could not endure the low wages, so she resigned. In early 2020, she began seeking legal assistance.
But what awaited were threats from her former employer.
"[The former boss] threatened me by saying the Chinese community is small and told me to be careful."
The business owner even contacted Xiao An via a third party, saying he wanted a "private settlement”.
With legal assistance, the threats did not bother Xiao An too much.
She was able to recover all her losses after receiving assistance and was later paid a legal salary for her work as a full-time employee.
*Not their real names
