$1 Billion In Unpaid Wages Under 'Broken' Australian System: Report

Australia's system to recover unpaid wages is broken and masks the real scale of employers ripping off migrant workers, a new report says.

The study from two Sydney universities suggests that most temporary migrant workers know they're being underpaid but only one in 10 takes action to recover wages.

The reason for the workers' inaction isn't poor English or a lack of familiarity with the Western legal culture, the report's authors say.

Rather, the risks to a worker's employment or immigration status and the amount of time and effort required outweigh the low likelihood of success.

Just three per cent of more than 2250 workers surveyed said they had contacted the Fair Work Ombudsman and, of those, three in five recovered nothing.

A previous report by the same authors suggested one in three international students and backpackers earned about half the legal minimum wage.

"The system is broken," UTS senior law lecturer Laurie Berg, the report's co-author, said in a statement

"It is rational for most workers to stay silent.

"The scale of unclaimed wages is likely well over $1 billion."

Ms Berg and her co-author UNSW senior law lecturer Bassina Farbenblum called for urgent structural reform.

They want remedial mechanisms accessible to individual migrant workers and a law to prevent the FWO sharing evidence of visa breaches with the Immigration Department.

"Against a culture of impunity, predicated on employers' assumptions that migrant workers will remain silent, these mechanisms are critical to detecting wage theft and holding employers accountable," the report said.

A Queensland parliamentary inquiry into wage theft was told in August the practice was a fact of life for many people.

Victoria's Labor government has promised to criminalise wage theft if re-elected on November 24.

Business groups have argued criminalising incorrect interpretation of complex industry awards would be unfair.

A Senate report in 2016 suggested up to one in 10 Australian workers were temporary migrants but ABC Fact Check found in 2018 there was a dearth of data on how many temporary visa holders are in work.