International students deserve better than exploitation

24 August 2017

International students make an important contribution to the education sector in New Zealand, so we can – and should – do better on their behalf, says Christina Stringer.

Media reports over recent months have highlighted the exploitation of international students who come to this country to attend private training establishments (PTEs). The latest coverage has been on Indian business-owners selling jobs to graduates. 

Unfortunately, this situation is not new. In December, 2016, I released the findings from a two-year research project – Worker exploitation in New Zealand: A troubling landscape – undertaken for the Human Trafficking Research Coalition.

My research showed that international students, and in particular those attending PTEs, are often vulnerable to exploitation. Many of these students, and particularly those from India, are told prior to arriving in New Zealand that permanent residency is easy to obtain and that jobs are plentiful.

But the reality is that many international students find it difficult to obtain employment while studying – particularly those studying at PTEs. Some commented that they felt trapped by the lack of job opportunities, many worked for less than the minimum wage – often just $5 an hour – while some worked 90-hour weeks but were only paid for half that. Others were charged a fee – sometimes as high as $7000 – by prospective employers.

Interviewees suggested there were close links between overseas education agents, PTEs, employers, and even accommodation providers – particularly in the kiwifruit industry. 

International students in New Zealand are permitted to work 20 hours a week while studying and full-time during holidays. Once they complete their study, they are entitled to a post-study work visa. An open visa allows graduates 12 months to find a job related to their studies, while an employer-assisted post-study work visa grants them the right to work for two years. After two years, an application for residency may be filed under the Skilled Migrant Category.

International students who want to stay in New Zealand will actively seek employment which will qualify them for permanent residence. And, in turn, some become caught up in ‘cash-for-job’ schemes. 

These schemes operate in different ways. In some instances, the prospective employee pays money to the employer to secure a job. The money is then paid back to the employee through the formal wage system. In effect, the employee pays their own wage, including PAYE tax. Alternatively, the employer pays the employee a nominal wage – typically $5 an hour – with the balance of wages paid by the employee. 

Some employers require a lump sum of money paid upfront. Typically, the employee premium ranges from $20,000 to $40,000, though $60,000 is not unheard of. 

It is an issue that Immigration New Zealand is fully aware of, as John Gerritsen made clear in a recent Radio New Zealand report.

A 2014 MBIE discussion document, Playing by the Rules, refers to workers paying employment premiums as ‘money-go-round’ schemes. In this document, MBIE highlights a case involving a Chinese woman who had recently graduated and paid $27,000 to secure employment.

Such ‘cash-for-residency’ schemes are becoming increasingly normalised.

Some employers specifically target international students, as they are seen to be desperate to obtain employment. It can be difficult for international students to question what they are told by their employer, and they are often afraid to speak up as many perceive this will put their visa into jeopardy.

The international student industry ranks as New Zealand’s fourth-largest export earner, worth approximately NZ$4 billion a year. The Government aspires to grow the market to $5 billion by 2025.

But it must be acknowledged that international students make an important contribution to the education sector in New Zealand beyond just dollar terms: We can and should do better on their behalf.

Read the published article:

Christina Stringer

Christina Stringer is an Associate Professor in the University of Auckland Business School's Department of Management and International Business.

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