Debt bondage is when someone is forced to work to repay an excessive debt.
The debt may be real or not, but the person believes it is real.
In situations of debt bondage, the amount of work someone is doing to pay off the debt might be unreasonable.
The real value of the work they are doing may not be applied to the debt. It may not be clear how long they must work or how much work they must do.
An employer or recruiter may tell someone the debt is to pay back:
- recruitment fees
- travel costs for getting them to Australia
- visa sponsorship
- accommodation, food and other costs.
The employer or recruiter might then make the debt much bigger than the real costs involved.
Debts can also grow if employers undervalue the work done or unfairly increase costs or interest rates. This is even more of a risk if someone cannot read or write in English.
The employer or recruiter might keep adding to the debt, saying it is for food, clothing or other costs.
It may be impossible for someone to ever repay the debt.
This unpaid debt might be passed on to the person’s children or other family members. These family members might then be trapped into working to repay the debt, too. This could be for a season, years or generations.
Debt bondage is a serious crime
In Australia, it is against the law to make a person work in debt bondage.
Under Australia’s Criminal Code, the penalty for debt bondage includes jail for up to 7 years.
Workers should not pay for visa sponsorship
Migrant workers can be at greater risk of debt bondage due to:
- dishonest recruitment agencies or labour hire firms
- language barriers
- not knowing about Australia’s workplace laws and protections
- fear that they will lose their visa if they complain (see Your rights).
It is illegal in Australia for an employer or recruiter to request payment for visa sponsorship or a visa.
It is also illegal for an employer or recruiter to demand payment in return for a job.
Remember, an employer or sponsor cannot cancel your visa, even if you have not followed your visa conditions. Only the Australian Government Department of Home Affairs can cancel a visa. If your employer treats you very badly and you report it to the Fair Work Ombudsman, your visa will not automatically be cancelled, even if your employer sponsored you to come to Australia.
What debt bondage looks like
In addition to general warning signs of modern slavery, someone experiencing debt bondage may:
- be tricked into working for little or no pay, below the minimum wage
- not have direct control over their money
- be made to pay off large ‘fees’ to do with their recruitment, accommodation or food
- have all or most of their wage taken to pay off their ‘loan’
- have no control over the debt that they build up.
Poor working conditions and underpayment are serious, even if they are not debt bondage or another type of modern slavery. Find out more about workplace rights on the Australian Government Fair Work Ombudsman website.
You can find more information, including information specifically for migrant workers, at the Australian Red Cross Work Right Hub or by emailing national_stpp@redcross.org.au for help. You can also search the Work Right Hub’s National services directory.
Find out more about how to get help for yourself, support someone else or report suspected modern slavery.
Need urgent help? If you or someone you know is not safe, or it is an emergency, phone Triple Zero (000) and ask to speak to the police. You can ask for an interpreter if you need one.