Promise of milk and honey in New Zealand not matched by reality of relatively high cost of living.

Quan, a 20-year-old student visa holder from Vietnam, works up to 50 hours a week in a retail shop and gets paid $7 an hour.

The business diploma student knows he is breaching his visa conditions, but says he needs the money as living and studying here are more expensive that he expected.

"No choice, no work, hard to get here," he says, adding he is lucky to have his job.

"$7 not bad pay, know people on less, a lot less."


AUT business school researcher Danae Anderson, who interviewed Quan, said his situation typifies the vulnerability of migrant youth workers - they are easy targets for exploitation.

A study by Ms Anderson, Suzanne Jamieson and Krish Naidu on the issue of foreign student workers last year found many breaching visa conditions, being paid below the legal minimum wage and working in poor conditions.

The report found 93 students surveyed were paid between $8 and $11, which was under the minimum wage of $12.75 set at the time.

"A lot of the students I interviewed, especially the Indian students, had been promised milk and honey in New Zealand by their agents, which they find is not the case when they arrive," Ms Anderson said.

"These students have been sold a pipedream."

Most arrive already on a financial back foot, having taken large loans at high interest rates back home, which they have to service on top of the high cost of living here.

"Students are told of the type of money they could be earning here, but they are not told that goods and services are not sold at Indian or Vietnamese prices," Ms Anderson said.

She said industries here have been set up based on the use of illegal migrant workers, and not enough is being done by authorities to investigate them.


Her first research was based on the primary industries and the horticulture sector, but she believed it was just as widespread in the service and sex industries.

Ms Anderson said migrant communities ripped off their own, with Chinese hiring Chinese and Indians hiring Indians.

The AUT researcher said she knew of companies that were being set up to provide contract work to larger companies, using migrant workers as cheap labour.

"It is not uncommon to see these workers being sent by vans to their workplaces, or even to the ferry terminal to work ... on Waiheke."

She said up to six migrant workers would sometimes share a one-room apartment, sharing beds by working different shifts, just so they could afford to have a roof over their heads.

The Tax Justice Network estimates the black economy - wages under the table, cash jobs and crimes - is costing more than $7 billion a year in lost tax dollars.

However, Ms Anderson said it would be impossible to estimate how much was being lost through employment of illegal migrant workers.

Dennis Maga, co-ordinator for Unimeg, a migrant workers union, said the exploitation of migrant workers has been going on for years, but had only recently received greater exposure because of an increase in the number of migrant service centres, and interest in the issue from the media and academics.

In 2011, a Thai university lecturer who came to New Zealand under the Silver Fern Visa policy, which was aimed at attracting young, highly skilled migrants, was employed as a food court worker for $6 an hour.

Chanon Jitkomut, a sole breadwinner in his family, told the Herald then that he took the job because he had a wife and child in Thailand "waiting for me to send money".

Last year, eight former workers at a central Auckland liquor and convenience store lodged a complaint with the Labour Department about pay rates as low as $3 an hour and poor working conditions.

It was not difficult for the Herald to find migrant workers who were being paid less than the minimum wage of $13.50 an hour.

An Indian worker at a Mt Roskill Indian eatery that specialises in sweets and vegetarian products claimed he was paid $2 an hour, but is supported with meals and accommodation by his employer.

Another student worker, a 25-year-old Thai, works 40 hours a week at a massage therapy clinic but is only paid a commission for the clients she services.

However, an employment fraud victim-turned-student worker advocate said those who got paid - even $2 an hour - were the lucky ones.

"Many are in fact working for nothing, and some are having to pay their employers and taxes for their jobs," she said.

The former international student from India who was asked by her employer to pay $5000 to keep her job did not want to be identified as she is helping Immigration New Zealand with investigations into fake job offers being sold to international students.

Under a scheme known as PYO - or pay your own - migrants are asked to pay large sums of money to cover the cost of annual wages, including tax.

The employer returns the take-home pay to the employee and pays the tax portion to the Government.

The fake wage payments are then used by the migrant worker as proof of employment to gain permanent residency.

One Indian student, who also paid $5000 for his job in an information technology firm, said he did not think it was wrong at first because back in India "it was common to pay bribes to get jobs".

But he felt cheated after finding the job was not a genuine position and was created just to help him gain residency.

The student was asked to pay an ongoing cost to the company if he wanted to remain "employed" and receive support for his residence application.

Labour Minister Simon Bridges said exploitative cases of workers being paid less than the minimum wage were illegal and unacceptable and needed to be dealt with firmly.

Seventeen businesses, mainly Chinese restaurants, were visited by labour inspectors from the Ministry of Business, Innovation and Employment last year after complaints relating to underpaid migrant workers. But they found only minor breaches of minimum employment standards.

"The breaches were resolved and no further action was taken," said ministry spokesman Alastair Stewart.


A refugee mental health agency says many refugees are being put under huge stress by unscrupulous employers offering cash jobs or work as independent contractors.

Refugees As Survivors chief executive Gary Poole says his agency tries to steer refugees away from employers offering such jobs, especially in horticulture. But sometimes it is too late.

"Most of these people want to work, they don't want to be on the dole," he says. "If someone is going to pay them, they will work and trust them. They don't understand the implications of ACC or tax or any of those things. They are not trying to work the system at all, it's just that they don't know."

In at least two cases, refugees working at a farm have been surprised to receive bills of up to $2000 from ACC a year after they started working. Until then, they did not realise that they had been hired as independent contractors, responsible for their own ACC payments and with no rights of ongoing employment, holiday pay or sick leave.

The company deducted withholding tax so most were not hit with tax bills, but the unexpected ACC bills were a shock for families on minimum-wage incomes.

"It puts them in huge stress because many of them have come from traumatised backgrounds," Mr Poole says.

Northern Amalgamated Workers Union secretary Maurice Davis says some growing operations have "a shrinking core of permanent workers and are using more precarious workers as their major labour model".

In one case, these are "independent contractors". In another case, workers from Kiribati and Tuvalu are employed under the Recognised Seasonal Employer scheme, which provides work permits for up to nine months but is being used on a rotating basis as an ongoing workforce.

"Often the same people come back year after year, but they don't end up having any claim to settle in New Zealand," Mr Davis says.

The workers are billeted with local families from the same islands who also work for the growing business.

- Simon Collins
* 40.5 per cent working in breach of visa conditions
* 37.8 per cent paid below minimum wage
* 37.8 per centprecarious and contingent work
Source: AUT University study.
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