Fair Work Ombudsman secures $40,000 over an Indian student paid no more than $14 an hour

An Indian international student worked as a casual console operator at a service station on Leakes Road in Truganina, in Melbourne’s west. He was paid no more than $14 an hour. He was owed at least $28.38.

When the Fair Work Ombudsman came looking, the outlet’s operator, Bharathi Karnati, handed an inspector pay slips that overstated the rates she had paid the worker.

On 14 May 2026 the regulator announced that the Federal Circuit and Family Court had imposed $40,000 in penalties. It is the fifth time the regulator has secured penalties against former operators of United Petroleum-branded outlets, and the total across those five matters now exceeds $270,000.

The underpayment itself was $2,337. The penalty is seventeen times that, and the judge described the false records as an especially serious part of the conduct.

What the court found

Bharathi Karnati operated the outlet as a sole trader and former commission agent. Her husband, Ravikanth Baddam, managed it. The employment ran from December 2020 to January 2021.

The lawful rate came from the Vehicle Repair, Services and Retail Award 2020. The rate paid was roughly half of it. Judge Amelia Edwards noted that the worker had been left with less than half his lawful entitlements.

Penalties were split. Karnati was penalised $28,000 and Baddam $12,000. Baddam admitted he was intentionally involved in the record-keeping and pay slip breaches.

The underpayment was rectified after the regulator investigated, and both respondents admitted the contraventions in court.

Judge Edwards described the false records contravention as especially serious, finding that the conduct “must be understood as a deliberate attempt to prevent the FWO from discovering the non-compliance with workplace laws and minimum conditions of employment”.

She added that “general deterrence is particularly important in the circumstances of this case where the contravening conduct involves the provision of false information and the creation of false documents”.

The court also noted something that will read as familiar to many international students. Not receiving regular pay slips made it difficult for the worker to apply for a rental home or to make other financial applications. The harm from a missing pay slip reaches well beyond the wage to everything a pay slip is needed for.

Acting Fair Work Ombudsman Rachel Volzke described the conduct as “a blatant breaching of workplace laws” and issued the warning the regulator clearly wanted on the record: “Our experienced inspectors will see through false pay slips and the underpayments they seek to hide.”

Judge Edwards was one of four judges whose appointment to the Federal Circuit and Family Court (Division 2) was announced on 23 December 2025; she commenced in the Melbourne registry on 3 February 2026. The Ombudsman makes no allegations against the current operators of the Leakes Road outlet, and United Petroleum itself is not named as a respondent in any of the regulator’s releases on these matters.

Five outcomes from one investigation

This case did not arrive on its own. It is the fifth penalty outcome from a single Fair Work Ombudsman investigation into the United Petroleum network, which audited twenty branded outlets across Tasmania, Queensland, New South Wales, Victoria and South Australia.

In February 2025 the court penalised KLM Foods Pty Ltd $135,143 and its sole director Loveleen Gupta $44,078, a total of $179,221, over underpayments at the Sandy Bay outlet in Hobart and the Kingston outlet just south of Hobart. The regulator also sued Vizaan Pty Ltd, which employed one of the Kingston workers, but that company went into liquidation after the case was filed and the proceedings against it were stayed. Those matters involved four visa holders, including workers from India and Bangladesh, two of them on student visas and one aged nineteen to twenty. The underpayment was $20,230 across two months, plus an unlawful cashback of $6,353.

In August 2025 the court penalised the operator of a Sunnybank Hills outlet in Brisbane $15,984. In September 2025 it penalised Sai Enterprises Pty Ltd and Raman Monga $38,500 over a Queenstown outlet in Adelaide, involving three international students and $2,668 in unpaid annual leave, which was repaid.

A sixth action, over an outlet on the Princes Highway at Hallam, was filed in October 2025 and is before the court. That worker is described as an Indian national on a temporary resident visa rather than as a student.

Add the five decided matters and the arithmetic reaches $273,705, which is what the regulator means by more than $270,000.

Worth noting for anyone comparing coverage: the regulator counts penalty outcomes, and the two Tasmanian matters are counted separately. The earlier release described the Hallam filing as legal action in relation to a sixth United Petroleum outlet. On the regulator’s own count of five litigations already commenced, it is also the sixth court action. Both statements are correct.

The criminal offence that could not be used

Since 1 January 2025, intentional underpayment of wages has been a criminal offence in Australia. Section 327A of the Fair Work Act, inserted by the Closing Loopholes reforms, carries, for an individual, up to ten years imprisonment or a fine of the greater of three times the underpayment or 5,000 penalty units, or both; for a company the fine is the greater of three times the underpayment or 25,000 penalty units. At the penalty unit value of $364 that applies from 1 July 2026 under the Crimes (Amount of a Penalty Unit) Instrument 2026, that is up to $1,820,000 for an individual and up to $9,100,000 for a company.

The Truganina conduct is close to the archetype the offence was written for. Deliberate underpayment of a vulnerable visa holder, then false documents handed to an inspector.

The offence could never have applied to it. The conduct occurred in December 2020 and January 2021, four years before the law commenced. Criminal law does not operate backwards, and no serious account of this case should imply otherwise.

That leaves the more useful question. Since the offence commenced on 1 January 2025, how has it been used at all.

The answer is that it has not been used

At a Senate inquiry hearing on 4 May 2026, the regulator confirmed that in 488 days since the offence commenced there had been no charges and no prosecutions, and that no matter had been referred to either the Australian Federal Police or the Commonwealth Director of Public Prosecutions. Of 39 suspected wage theft matters examined, four had become full investigations, three of which were ongoing, and seven were at early stages. The regulator has $49.5 million over four years to administer the regime.

Senator Fatima Payman put the position to officials directly: “Just so I’m clear, in 488 days since the offence commenced … millions of dollars have been spent, and not a single matter has been referred to the authorities?”

Irene Nikoloudakis, a PhD candidate in law at Adelaide University, had reported in The Conversation on 17 April 2026, Australian time that there had been only two criminal investigations and zero prosecutions, and that a regulator representative had declined to answer parliamentary questions about live investigations because disclosure could negatively affect them.

There is a structural reason for the silence, and it is not a scandal. Only the Director of Public Prosecutions or the Australian Federal Police can commence proceedings under section 327A. The Fair Work Ombudsman’s role is to investigate and refer, or alternatively to enter a cooperation agreement with an employer who self-reports. Absolute liability applies to parts of the offence but intention must be proved for the rest, which narrows it considerably.

Two reviews have examined the offence. A Senate inquiry into wage theft was referred on 24 March 2026 and reported in June, with a majority not convinced the criminal offence is having the impact anticipated, and pointing instead at award complexity as the structural driver of most underpayment. A separate review of the Closing Loopholes reforms by former Fair Work Commissioner Susan Booth released a draft report on 18 May 2026.

The Booth review’s final report was tabled in Parliament on 20 August 2026, and the review found that no criminal prosecutions had been finalised.

The protection that has been paused

For a worker on a student visa, the reason not to complain has always been the visa rather than the money.

The Assurance Protocol was the arrangement designed to answer that. Under it, the Fair Work Ombudsman and the Department of Home Affairs agreed that a visa holder who came forward about exploitation would not have their visa cancelled on the basis of a work-related breach. It covered student, working holiday, skilled and other temporary visas.

That protocol is currently paused. It has been replaced for the duration of two pilots, the Strengthening Reporting Protections Pilot and the Workplace Justice Visa Pilot.

The difference matters. Both pilots require certification from a government agency or an accredited third party before protections apply. A worker who simply rings the regulator is now in a different position from one who has been through a certification process.

The regulator’s pages do not state when the pilots end.

Anyone advising international students should know this has changed, because the confident advice that a complaint cannot affect your visa is no longer accurate in the form it was given while the protocol operated.

What the data shows about who this happens to

The Fair Work Ombudsman filed 171 litigations involving visa holder workers and secured $39 million in penalties in cases that included visa holders, across the eight financial years to June 2025. In 2024-25 alone it recovered $358 million for more than 249,000 workers and filed 73 new litigations.

The most detailed evidence on who is underpaid comes from research rather than from government. The Migrant Justice Institute published Off the Books in May 2026, reporting the 2024 National Temporary Migrant Work Survey, with 9,963 responses in six languages. It was funded in part under the National Action Plan to Combat Modern Slavery grant program, with support from Minderoo Foundation’s Walk Free initiative and the Migrant Workers Centre.

Its participants were nationals of 140 countries. The largest cohort, at 16 per cent, was Indian, ahead of China at 11 per cent and Nepal at 9 per cent.

Its central findings are stark. Two thirds of migrant employees not working under an ABN were paid less than their individual minimum entitlements, by an average of $8.80 an hour. One in five was underpaid by more than $10 an hour, and one in ten by more than $15. More than a third were paid below the national minimum wage floor. The average underpaid international student loses $11,107 a year, which the researchers scale to roughly $61 million a week across the cohort. Almost one in four participants (23 per cent) were paid at least partly in cash, and cash is a strong indicator of underpayment.

One participant, an Indian international student in New South Wales, told the researchers that most employers paying in cash pay less than $19 per hour in his experience. Another, an Indian student in Queensland, described having to resort to working in cash and being underpaid so as not to exceed the work limit on her visa. That second answer explains a mechanism that penalties alone do not reach.

Associate Professor Bassina Farbenblum of UNSW Law and Justice, who co-authored the report with Associate Professor Laurie Berg of UTS, put the power dynamic plainly: “When an employer controls whether you work next week and whether your visa remains intact, the power imbalance is enormous, and predictably employers exploit it,” she said in a UTS release.

What a worker in this position should do

Keep your own record of each shift’s start and finish time. In the Truganina case, the operator admitted that the pay slips handed to an inspector were false.

Ask for pay slips in writing, and keep the request. An employer must issue them within one working day of pay day. The absence is itself a contravention, and, as the court noted here, it costs you a rental application as well as a wage.

Understand that the criminal offence exists but is not what will help you. It commenced in 2025, it requires proof of intention, only the prosecuting authorities can bring it, and as at the last public figures, the Senate hearing on 4 May 2026 and the Booth report of 20 August 2026, it had produced no charges and no finalised prosecutions. The civil route through the Fair Work Ombudsman is what has actually delivered $273,705 across these five service station matters.

And be aware that the visa protection you may have been told about is currently in a different form. Ask the regulator what protection applies to you before you lodge, and get the answer in writing.