Premier Roger Cook said legislation that was supposed to protect Aboriginal people actually resulted in discrimination, hardship and exploitation.
"I apologise to Aboriginal men, women and children who worked in Western Australia between 1936 and 1972 often for decades for no pay or not enough pay," he told the WA Parliament on Tuesday.
Mr Cook said many of the people exploited during the period were no longer alive and he apologised to their descendants.
"We are sorry for the hurt and loss that your loved one suffered," he said.
"The fact that this treatment existed for Aboriginal workers for decades is a blight on the legacy of successive governments."
Elder Mervyn Street was instrumental in legal action on behalf of workers and their relatives. (Richard Wainwright/AAP PHOTOS)
Senior Gooniyandi elder Mervyn Street launched legal action in the Federal Court in 2020 on behalf of the surviving workers and their relatives.
Mr Street was in state parliament for the Premier's formal apology on behalf of the WA people.
"I'm really happy to hear that," the drover-turned-artist told reporters outside parliament.
The wages policy allowed the state government to withhold up to 75 per cent of an Aboriginal or Torres Strait Islander worker's wage.
Minister for Aboriginal Affairs Tony Buti said it was based on a belief that Aboriginal people were not worthy of equal rights.
"This was a shameful period of our history," he said.
He said the legacy of the laws continued with broad social and economic harm visible in the Aboriginal community.
The WA government settled the case in early-November, with families and survivors set to be financially compensated.
The settlement is yet to be approved by the Federal Court, which will happen after eligible workers and their families are registered.
The court will also decide the exact amount payable to each worker or their family, though the WA government has agreed to a payout of up to $180.4 million, with each claimant eligible to receive $16,500.
Bringing Them Home and the WA Stolen Generations Aboriginal Corporation welcomed the apology but said the settlement was not enough.
Many of the workers were in the Kimberley region on pastoral stations and in institutions and missions.
Lawyer Vicky Antzoulatos previously said the apology was a significant step towards reconciliation for the Aboriginal men, women and children who worked under the policy "often under horrific conditions".
"It is a shameful part of WA's history," she said.
"The government has rightly acknowledged this injustice and we know, from speaking to our clients, what this recognition means to many of the people we represent."
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