Sanctions on employers of illegal workers

I attended a Senate Committee hearing today examining some new migration legislation – the Migration Amendment (Employer Sanctions) Bill. Unlike most government amendments to the Migration Act, these seem to be broadly positive. Even by government standards, they’ve been a long time coming, as they were first mooted back in 1999.

The effect of the Bill is to introduce new offences for employers and labour suppliers who knowingly employ people who do not have work rights in Australia. According to the Explanatory Memorandum for the Bill, at 31 December 2005, there were estimated to be just under 46,400 overstayers in the Australian community. Of that number, around 56%, or 26,200 people had been in Australia unlawfully for more than 5 years. Many of the long-term overstayers would be engaged in some form of paid employment. Of course some people who are here lawfully, such as tourists, may also be working in contravention of their visa.

Currently, the employee can be penalised for working unlawfully, but it is difficult to fine those who employ them, even when they clearly know the person is not entitled to do so.

This is a double edged problem. While there is clearly a number of employers who specifically target unlawful workers because they can be more easily exploited, there is also a significant labour shortage in some areas which can mean that people of uncertain entitlement are the only labour that an employer can find.

Even though we are taking in record numbers of permanent and temporary residents on skilled visas with the stated intent of meeting these labour shortages, there are still enormous inefficiencies in the way the system works. As has been made clear to a separate Committee inquiry that is still under way, some people are coming to Australia under our skilled migration program, only to find their skills aren’t recognised and therefore cannot access the area of employment they expected, while employers are still unable to find people to fill their positions.

None of which is to excuse people who deliberately employ illegal workers, but it is worth being aware of the conditions in some parts of the labour market. As the current migration debate in the USA shows on a much larger scale, there is a big contradiction between the need of their employment market to have people doing the sort of low paid work that migrants – lawful and unlawful – are often the only ones prepared to do, and the desire to tightly regulate and control what type of people get to stay in the country.

This has resulted in curious compromises being proposed to combine a ‘tough on illegal migration’ measure which would criminalise illegal migration, with a measure that would allow an estimated eleven and a half million illegal migrants already in the USA to be able to apply for citizenship.

The USA’s economic system relies heavily on millions of illegal workers, but its political system relies on continuing to keep them powerless and disenfranchised. While our economy does not rely much on illegal workers, it does rely heavily on migrant labour – increasingly on temporary visas as much as permanent – with some similarly contradictory political messages as a result.

ADDENDUM:

I just got the transcript from the Committee hearing which contained some comments from the Department about the aspects of the current migrant intake aimed at filling employment gaps. I found it interesting and others may also:

This year we have the largest migration program probably in 30 years. The skilled migration component of that, at 97½ thousand, is the largest ever skilled stream component in Australia’s history.

In addition to that permanent migration element that addresses particularly the skills shortages, there have been a range of other temporary entry options that have been worked on. In terms of the skilled area again, the long stay business visa—the so-called subclass 457 visa that enables employers to sponsor skilled workers to come to Australia—has been expanded. We are expecting to be issuing in the order of 60,000 visas to temporary residents for stays of up to four years this year. That is in comparison to just under 50,000 last year and closer to 40,000 the year before. So there has been quite a big increase in the number of people coming in from overseas.

At the same time, the student visa program has increased. Again, it is at record levels. These are people who can work 20 hours per week. They do not necessarily all have to be employed in skilled occupations.

Quite importantly, the working holiday maker program has also been expanded in a particular way to address some of the issues that you have alluded to, particularly in the horticultural area and in regional Australia and the like. People who come to Australia on a working holiday maker visa can apply for a second one if they have in fact worked in those sorts of areas. So we are having not only larger programs but also an expansion to encourage people to work in areas of need.

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22 Comments

  1. Hi Andrew, I’d be interested to know of the stats on employers who supposedly cannot get Australian workers and are forced to use migrant labour – but in reality the migrant labour is just used because they are cheaper, thus circumventing the Australian Award Wage system (may it RIP!).

  2. Deborah – it is an area where there needs to be more solid data gathered. Although I know for example that a number of abbatoirs and fruit growers were only able to operate in recent years because refugees on temporary protection visas did the work (legally I hasten to add) – they definitely couldn’t fill the jobs otherwise. Mind you, I also know in some cases that was because the working conditions were less than safe, and it is a lot easier to exploit workers on temporary visas and make them accept unsafe conditions that others wouldn’t.

    The continuing expansion of the working holiday visa program (now over 100 000 a year) is aimed at filling the need in this sort of semi-skilled and unskilled work.

    Red Crab, I had that thought too. An ID card wouldn’t really help with this problem, unless we gave it to every person on temporary resident visas and permanent resident visas, as well as Australian citizens. However, that probably won’t stop the Government from using it as a reason for why it’s needed – in the same way they are suggesting it will help protect against terrorism, when it plainly will do no such thing.

  3. Andrew,
    Hypothetically, how would this impact on the domestic situation where people are employed on a cash basis for cleaning, etc? Often this cash supplements centrelink payments. Is it assumed that the employee is the one under the obligation to declare that income?

  4. Jane

    Non-declaring of income – whether for tax purposes or welfare entitlements – is a different issue to not having a legal entitlement to work in the first place. While both activities could be seen as part of the so-called ‘black economy’, they touch on different areas of the law.

    A person whose visa status doesn’t entitle them to work wouldn’t be receiving Centrelink payments.

  5. Migrants love cash. Regardless of whether they are citizens or on a visa or whatever, they love cash. They stick together to support each other and, there are many, that at every available opportunity will bypass the Government and do private deals and not pay tax and/or benefits. They see the Government as thieves and, one really cant blame them! When you stop to consider, they are being loyal to each other.

    This problem, at a small scale is nothing and to be expected but when it is adopted as a way of living it is a much bigger issue as this type of thing causes resentment and hostility between people and also deprives society of alot of much needed funds.

    Maybe that might be one reason why there are so many problems with multiculturalism. Maybe Australians feel that they are being cheated and robbed and it makes them angry and upset.

    Just a thought.

  6. Ok sorry, didn’t mean to be off topic but your link did talk about social security benefits.
    I guess the real point of my question was how far such policing would go into the private sphere of arrangements between individuals? I do know people who have such arrangements with individuals who do not have appropriate work entitlements. However, I do realise that this is quite an insignificant part of the overall scheme you are talking about.

  7. i dont have a problem with some ppl on visa,s doing a bit of work that others wont do.its been gowing on for years.
    so why is the govt bringing it up at this point in time
    seems to me that it will be used to justify this new card.
    i dont have a problem with an identity card either.
    its the security i have a problem with.
    as far as the black economy is concerned the gst has created the biggest one australia has ever seen.
    i cant blame some ppl either imagine payng 48c in the dollar and then buying fuel at $1.50+ of which the govt gets half in exice and gst.
    i think that a few ppl who do a few weeks work picking fruit to fill up there hired camper with fuel that the govt gets its cut from is a big problem.
    its a tipicle ploy of govts to start to kick those who cant kick back to tack focus of the real objective so,s they can back door legislation that is a bit suspect i.e the new card.

  8. Jane

    private payment of people who don’t have work entitlements would be against the law, although it seems likely that this legislation will be targeted mainly at those who conduct large scale employment operations relying on illegal migrants or people without work rights, rather than $50 cash for a gardener or a nanny. Although the worker still does such things at their own risk, because if they get caught they would be likely to be deported, even though the employer would probably only get a warning rather than a fine in such a circumstance.

    As to Jolanda’s suggestion that migrants use the cash economy more than others in Australia, I’m not aware of any evidence showing this. Again the legislation I’m talking about is dealing with people who don’t have entitlements to work, which is different from those who are entitled to work using the cash economy to avoid tax or loss of welfare payments.

    Some people suggest from time to time that tax dodging is an Australian tradition (using your argument (and Kerry Packer’s that the Govt are thieves anyway). If this is the case, one could argue that any migrants who engage in this are just adopting quickly to the Australian way of life, something opponents of multiculturalism usually call for.

  9. Andrew, of course you are not aware of any evidence showing that migrants use the cash economy more. It is done under the table, there is no evidence. I am however of migrant stock and I am telling you that there is alot of it happening out there.

    A little tax dodge and not paying tax are two completely different things altogether.

  10. here,s what stinks
    a person works for a wage which they pay 48c in the dollar tax.whith the money that is left after bills decides to pay someone $100 for cleaning the yard because they are too tired to do it themselves.
    the person that made the cash money goes and buys fuel for $80 of which the govt gets 50% then has enough left for a packet of smokes which the govt gets 80% .
    but the govt still wants to get its part of the $100.
    now thats why they are called thieves.
    we all need to pay a fair tax i have no problem with that.but the govt seam,s to want it both ways .

  11. The thing that bugs me about migration is that it doesn’t seem to enter the equation when discussing Australia’s economic growth compared to other countries.

    Germany and France etc get beaten about the head for their 1% annual growth, which is blamed on their socialist policies and allegedly anti-free-market governments. Yet Australia grows at just over 3% per annum.

    That’s with HUGE mineral resources and with 1% population growth from immigration. I remember in the early 90s the figure bandied about was that 1% immigration caused 2% growth in the economy. That means Australia’s growth (compared to “old Europe”) is entirely due to immigration and not actually anything else.

    What I’m trying to say … it’s often easy to have a booming economy if grow your population every year, the hard part is growing your economy with a static population, which Australia will eventually have to do.

  12. Jolanda, we are all migrants dear unless we are aborigines so I guess you are right about using the cash economy being done by migrants.

    But really you are of Spanish descent married to a Lebanese man so your entire argument could be based on yourself.

    Like I am the grand-daughter of migrants we all are. There is simply no point beating up on migrants because they are legally in the country and this story is about people “unlawfully” working.

  13. Marilyn you are the one dear that keeps pointing out that I am of migrant stock, I used your words. I am Australian and no, I dont cheat the system and never have, I believe that there is a cost of living and if everybody paid their way and was honest and did their bit then we would all live well and be better off.

    Problem is that there are too many that abuse, they have this idea that the rules are for everybody else and not them.

    Our business has been audited and they had to pay us back, we were too generous. I dont believe in ripping of my fellow Australians and never have.

  14. Marilyn
    Well what am I then? I have a great grandmother who was Aboriginal?
    Or should I keep my comments to myself?
    Back on topic. The rules to punish employers is a long time coming, and a good idea. It removes a portion of the market for undercutting “legal” workers wages and entitlements.
    Quite frankly Im suprised this hasnt been the case at all! Thanks for bringing it to our attention.

  15. As far as I can figure, everyone likes a bit of cash in hand so not to pay tax, no matter how long their family has been in Australia.

  16. Sure everyone likes a bit of cash in hand muzzmonster. But some work it out so that they get the majority of their cash in hand and then they show the Government and Centerlink that they are not earning anything so then they dont pay tax, and then because they are shown as not earning an income the Government gives them all this money, benefits and entitlements and these people are making a killing at our expense.

    Its like the thing red crab was saying about taxes except this isn’t the Government theiving, this is people.

  17. There is no evidence that migrants rort the system. God you people are so thin skinned.

    Wide sweeping statements by the children of migrants about migrants being thieves is infuriating.

    Tess you have every right to comment as does Jolanda but stop blaming the migrants without evidence.

    Why punish anyone unless they are exploiting people? The declaration of human rights guarantees that everyone has the right to work and make a suitable living for survival.

    When sex slaves are found we don’t begin to punish the perverts who bring them here do we? We only punish the girls and women.

    Fine people if they are exploiting and using people but if X has kids to feed and cannot leave the country because he is afraid but DIMA had decided he cannot work to feed them, why should anyone be punished?

    We are all only on this island for the terms of our lives, we don’t actually have eternal mortgages on it you know.

    We have maybe 30 or 40 thousand people a year earning money without permission? Let’s all get over ourselves can we?

  18. i was told once by a very well respected senator i knew .
    the govt gets $1.50 retern for every $1 it prints .
    so whats the prob with a few ppl getting a bit of cash that the dam govt will get back anyway.
    as some good jerno,s have been saying its a smoke screen.
    we must all be looking for that which is not obvious.
    the govt is up to something we will not like.

  19. Here we go!
    One week I read in the paper that there are hundreds of thousands of long term unemployed in the country who can’t find work who are still subjected to harrassment from Social Security.
    Then I read that employers must employ (often unskilled) off-shore labour because there is a supposed labour shortage, here.
    Either the jobs are available, or not!
    If they are NOT available, how is that employers are said to be hiring off-shore labour?
    If jobs are available why do locals find it so hard to come across them?
    If jobs are NOT available, why are the unemployed then STILL harrassed by the authorities for not finding jobs, if jobs do not exist?
    Marilyn Shepherd, I understand your point about overseas people being entitled to as decent a life as ourselves.
    We both know that Billions on this planet live like dogs in places like Darfour, India, Horn of Africa, Pakistan so on so forth.
    But should not opportunites for these people come from the pockets of the Globalising rich rather than at the expense of local unemployed already at the bottom of the heap here?
    Local employers bringing workers in from over seas are trying to drive down local wages and conditions, not benefit the poor. Meanwhile, they import third world labour conditions into this country by stealth, whilst never being forced to take income cuts themselves. I understand that the chief beneficaries of labour market “competition” are the big bosses of TN corporations, and that at least one local executive now earns over $30 million a year while all the rest, offshore poor and local unemployed alike, are increasingly forced into a rat race for the benefit of the greedy few.

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