The Turnbull government has rejected the need for federal laws to clamp down on unscrupulous middlemen at the heart of a network of foreign worker scams, with new Employment Minister Michaelia​ Cash opting instead for industry self-regulation.

Asked specifically if there was need for action against labour hire middle men in the light of Fairfax Media revelations about systemic exploitation of temporary foreign workers, Ms Cash said: "Any proposal to regulate the operations of labour hire companies is best driven by the industry."

Minister for Employment Michaelia Cash said the Turnbull government "does not tolerate underpayment or exploitation of employees". Credit:Graham Tidy

Ms Cash pointed out that the labour hire industry body the Recruiting and Consulting Services Australia (RCSA) had released a proposal for an industry code. It is not yet clear if such a code would be voluntary or mandatory.

On Thursday Fairfax Media published the findings of an investigation with Monash University that revealed hundreds of thousands of temporary foreign workers at any one time in Australian were being illegally exploited and underpaid in what has become a widespread black economy for jobs.