What is the Fair Entitlements Guarantee (FEG)?

The Fair Entitlements Guarantee (FEG) is a government scheme that provides financial assistance to workers who lose their job due to employer insolvency or bankruptcy.

FEG assistance is only available where there is no other source of funds to pay outstanding entitlements to eligible employees due to the insolvency of the employer. When an eligible claim is made, the Government pays the employee and then may seek to become a creditor to recoup these costs from the remaining assets of the employer during the liquidation process. 

It helps recover unpaid entitlements, offering critical financial security during difficult times.

In 2019, the Migrant Workers’ Taskforce recommended extending the FEG to temporary migrant workers, a recommendation that was accepted by the Morrison Government but is yet to be legislated. Expanding the FEG scheme to cover all workers, regardless of migration status, will:

• Strengthen the integrity of Australia’s labour laws
• Reduce the risk of migrant worker exploitation
• Prevent rogue employers from using insolvency as a loophole to avoid their financial obligations'

The Problem: Temporary visa holders are excluded

• Despite their significant contributions to Australia’s economy, temporary visa holders are ineligible for FEG assistance.
• This exclusion leaves migrant workers without access to recover unpaid wages and entitlements when their employer becomes insolvent.
• It also creates loopholes that allow dodgy employers to exploit migrant workers while avoiding financial responsibility.

In 2018, Swatin came to Australia from Nepal to pursue a master’s degree, prior to this he was a software developer for 5 years. 

After two years as a student, he decided to stay and eventually secured a job at a local software company. For two years, Swatin worked hard, building his career and stability, until the company abruptly closed due to a lack of clients. 

Swatin and his colleagues were let go without proper notice. While others received compensation through the Fair Entitlements Guarantee (FEG), Swatin, as a temporary visa holder, was excluded. “It looks like the laws of Australia do not protect migrants,” he says. “Everybody else was happy and received compensation, but I didn’t get my two weeks’ pay or 4 to 6 months of super.” 

Swatin was told by the liquidator he was on a priority list for compensation, but repeated follow-ups went unanswered. The closure couldn’t have come at a worse time—Swatin had just bought a house in Melbourne and was still in Perth planning his move. “I didn’t know how I was going to make my mortgage payments. It was a scary time,” he recalls. 

What made the situation worse was the lack of transparency. The company’s owner falsely assured staff that most of them would be hired by another company taking over. Instead, the owner secured a director role at the new company, leaving the employees to fend for themselves. 

This issue is compounded by the ongoing cost-of-living crisis in Australia. For many migrant workers, living paycheck to paycheck is the reality as they navigate skyrocketing housing costs and increasing everyday expenses. 

Without the protection of the FEG, losing a job can have devastating consequences, leaving temporary visa holders unable to pay rent, buy essentials, or meet other financial obligations. 

How you can help

No worker should be left without protection when their employer becomes insolvent.

Excluding temporary workers from FEG not only leaves them vulnerable to hardship but also weakens Australia’s labour laws and encourages exploitation.