New Migrant Worker Protections: Intentional Wage Underpayment Now Has Migration Consequences

A recent change to migration law has begun reshaping the relationship between Australian businesses and their overseas staff.

The change targets serious payroll misconduct - specifically intentional wage underpayment - and how it interacts with an employer’s ability to employ and sponsor migrant workers under Australian migration law.

What does wage theft mean?

Under the Fair Work Act, intentional wage underpayment (often referred to as wage theft) involves an employer dishonestly underpaying an employee, knowing that the correct amount of pay is owed but choosing not to pay it.

This is different from a genuine mistake or payroll error that is corrected once it is discovered. The offence is directed at deliberate conduct.

In practice, intentional wage underpayment can include situations where an employer knowingly pays less than the legal minimum rate, withholds penalty rates or overtime, or fails to pay required entitlements such as allowances or leave loading, while understanding that those entitlements are owed.

Since January 2025, intentional wage underpayment is an offence under the Fair Work Act.

What has changed?

The Migration Amendment (2025 Measures No 1) Regulations 2025 aims to strengthen the Government’s response to migrant worker exploitation. It adds protections for temporary visa holders from employers who have intentionally underpaid their salaries.

The change expands the circumstances in which an employer may be barred from employing visa holders.

Under the amended rules, intentional wage underpayment is now a specific reason under migration law to prohibit a business from employing overseas workers.

A conviction for intentional wage theft under section 327A of the Fair Work Act is now treated as one of the "migrant worker sanctions" that can feed into the prohibited employer framework.

Where a court has convicted an employer of intentionally underpaying a temporary migrant worker, that conviction can now be used as an objective trigger for the Department to penalise the employer and protect migrant workers.

What is a “prohibited employer”?

Migration law allows the Minister to formally declare a business a Prohibited Employer.

The prohibited employer framework commenced in 2024 as part of broader migrant worker protection reforms. A prohibited employer is not permitted to hire new workers who are temporary visa holders.

In addition, the Department publishes information about prohibited employers on a public register on its website, including the employer's name, Australian Business Number (ABN) and the period of the prohibition. This public register operates as a 'name-and-shame' measure alongside the legal bar on hiring new migrant workers. At the time of publishing this article, only one employer is published in the register.

The recent amendment does not create the scheme. It adds a new way for an employer to become subject to the scheme, by linking wage theft convictions to the migrant worker sanction test.

Intentional wage underpayment and migration law are now linked

The new amendment means that, where this offence involves a temporary migrant, it can now be taken into account for migration purposes.

In practical terms, intentional wage theft can prevent an employer from accessing the employer-sponsored visa program as well as employing temporary visa holders, even if they are not being sponsored.

Who does this apply to?

The new intentional wage underpayment trigger applies where the underpaid worker holds a temporary visa or is unlawful. In practice, this will often include temporary skilled workers, Student visa holders and Working Holiday Makers, as well as other temporary visa holders who have work rights.

The focus of the change is migrant worker protection.

What does this mean for employers?

This amendment does not introduce new sponsorship obligations. It does not change nomination requirements or visa processing rules. It does, however, reinforce an existing principle: Access to the employer-sponsored visa system depends on lawful and fair employment practices.

Where serious and intentional underpayment occurs, the consequences may extend beyond workplace penalties and into migration law.

The business could be barred from employing any additional temporary visa holders, whether or not those workers are sponsored. For offending employers, this can have far-reaching consequences to their workforce and ability to conduct business. Depending on the type of migrant worker sanction, a prohibition can last for up to 5 years in many cases, and up to 10 years where a criminal offence is involved. For the most serious offences, such as human trafficking or modern slavery, there is no set maximum period.

Breaching a prohibition declaration is itself a criminal offence. A prohibited employer that allows a new temporary visa holder to begin work during the prohibition period may face further charges, including possible imprisonment.

What does this mean for migrants?

For migrants, the change signals a stronger link between migration law and workplace protections.

It recognises that serious exploitation of temporary migrants is relevant to whether an employer should continue to employ and sponsor overseas workers.

The reform also highlights the importance of awareness of an employer's compliance record when deciding where to work. Continuing to work in a workplace where intentional wage underpayment or other serious misconduct is occurring may carry migration risks for the individuals involved. If an employer is later prohibited, and a worker holds a sponsored visa with that business, there may be a risk of visa cancellation under existing provisions.

Final thoughts

The link between wage theft and migration law is compliance-focused. It is not aimed at employers who meet their legal obligations and maintain proper records. Employers with sound payroll systems and accurate record-keeping should have little to fear from the new settings.

The amendment is directed at deliberate wage underpayment. At the same time, it highlights that temporary visa holders who agree to intentional underpayment arrangements are participating in an unlawful situation.

Employer sponsorships and the broader migrant workforce remain available to businesses that pay lawful wages, keep proper records and comply with Australian workplace laws.

Rysher Migration represents businesses across a range of industries in Australia and offshore in relation to employer-sponsored visas and migration law compliance.

Contact Us to discuss how these changes may affect a particular business or visa program.

Stay tuned for more updates on immigration and employer-sponsored visas. Subscribe to the next ImmiUpdate below to stay informed.

For more information please Contact Us or email elan@ryshermigration.com.au

Elan Rysher is a Registered Migration Agent and Qualified Student Counsellor. He is the main Writer for ImmiUpdates and the founder of Rysher Migration.

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