Employing foreign workers may be necessary for your business to overcome labour or skill shortages. When doing so, it is important that you follow the right steps. As a sponsoring business, you need to make sure that your employees have valid working rights at all times. Additionally, there are certain obligations that you must comply with as their employer. This article will set out these requirements when hiring foreign workers.

1. Checking the Applicant’s Right to Work in Australia

It is your responsibility as an employer to make sure that your foreign workers have legal working rights in Australia. This applies even if you have obtained the employees from a labour hire working arrangement. Australian citizens, permanent residents and New Zealand citizens have full working rights in Australia. However, everyone else requires a visa and only a few visas allow for working rights.

You can check your employee’s type of visa and what conditions apply to them via the VEVO feature on your immigration account. In addition, you can ask them to provide you with the details of their visa.

Checks should be conducted:

  • before commencing work;
  • within two days of visa expiry dates; and
  • each time there is a material change in the employee’s circumstances.

However, it is recommended that you check these requirements every three months.

Types of Visas

Below is a list of the main types of visas and their working rights in Australia:

Visa Type Working Rights
Employer-sponsored visas (subclasses 482, 186 and 187) Full-time working rights
General Skilled Migration visas (subclasses 189, 190 and 489) Full-time working rights
Student visas (subclasses 500 and 485)

Subclass 500: 40 hours per fortnight, full-time in holidays

Subclass 485: Full-time working rights

Working holiday visa (subclass 417) Full-time working rights generally for one employer for up to six months
Training visa (subclass 407) Workplace-based occupational training for at least 30 hours per week. However, no more than 30% can be classroom based
Partner visa (subclasses 801 and 820) Full-time working rights
Bridging visas Same work conditions as previous visa
Visitor visas No working rights

Sanctions and Penalties

Employing illegal workers may result in penalties against your business. Depending on the type of sanction, a maximum penalty of up to $315,000 may apply.

2. Meeting the Obligations of an Approved Business Sponsor

Once you become an approved business sponsor and can hire foreign workers, there are a number of obligations you need to satisfy. These obligations start when your sponsorship is approved and generally finish between two to five years after the sponsorship approval ends. It applies to all sponsoring businesses.

Cooperate With Inspectors

Furthermore, inspectors may be involved when there is reasonable suspicion surrounding your foreign workers and their working rights. However, checks can sometimes be conducted randomly, especially when you have a large number of employees from overseas.

Generally, an inspector may:

  • enter your business premises;
  • inspect any work or process;
  • interview people;
  • inspect and make copies of documents; and
  • seek information about a person’s name and address if they believe a breach has occurred.

Ensure There Are Equivalent Terms and Conditions of Employment

In addition, as an employer, you need to make sure that your foreign employees are on the same employment terms and conditions to your Australian workers. This applies to:

  • their salary;
  • the duties and responsibilities of the job position; and
  • other working conditions. 

The Department will consider circumstances where foreign employees are in a ‘less favourable’ or ‘more favourable’ position compared to an Australian worker in the same or similar role. Consequently, this will affect the success of the visa application. 

Keep Records

Furthermore, as an approved business sponsor, you will be required to keep records of any relevant information relating to the sponsorship of a foreign worker. This includes:

  • any correspondences with the Department of Home Affairs; and
  • employment records of the sponsored employees.

In addition, you will be required to keep records of the recruitment process that shows you have not discriminated in any way during the process. This will be reviewed by the Department during the Labour Market Testing during the nomination application.

Readily Provide Information

Furthermore, in some circumstances, you may need to provide information concerning your foreign worker’s employment to the Department. These circumstances include:

  • cessation of employment;
  • change of work duties;
  • change of business structure or legal entity; or
  • bankruptcy and insolvency.

If these circumstances arise, you must provide information to the Department within 28 days.

Ensure That the Sponsored Employee Works in the Nominated Position

Moreover, as the employer, you must ensure the employee works in the position, program or activity that you have nominated them for. The employee is not allowed to work for another business (unless it is an associated entity). Furthermore, you are restricted from supplying them to work for another business unless a labour agreement is in place.

Pay the Associated Costs

In addition, when employing foreign workers, you are responsible for covering the costs of:

  • recruiting;
  • sponsoring; and
  • nominating the foreign worker.

However, you cannot transfer or recover any part of these costs from the employee or their family.

Unlawful Workers

Furthermore, if your employee becomes an unlawful worker, it is your responsibility to pay the costs for them and their family to leave Australia. This will include reasonable travel costs such as:

  • an economy flight; and
  • taxi costs to the airport.

However, it excludes paying for aspects such as:

  • excess luggage; or
  • costs associated with rental properties such as breaking the lease.

The government may request this payment from you if they are satisfied that you were unaware that the employee has become unlawful, or you were complicit or negligent. As an employer, you may be liable to pay up to $10,000 with the excess being charged to the unlawful citizen.

Additional Obligations Under the NTCC and SAF Levies

In addition, you will need to pay a government tax levy for workers you nominate under temporary and permanent employer sponsored visas. This is known as the Skilling Australian Funds (SAF) levy or the Nomination Training Contribution Charge (NTCC). It is a one-off fee for permanent employees and an annual fee for temporary workers.

The NTCC effectively replaces the previous training benchmarks that required businesses to contribute at least one per cent of their annual payroll to the training of local Australians. The money raised will go into the Skilling Australians Fund (SAF) Charge, a new government initiative to grow the number of apprenticeships and traineeships in Australia.

This affects all nomination applications made under subclasses 482, 186 and 187 from 12 August 2018. Applications made before this date do not need to pay the NTCC.

Consequences for Breach of Obligations

However, if you breach any of the above obligations, the Australian Border Force may:

  • issue an informal or formal warning;
  • serve an infringement notice;
  • bar or cancel the sponsor from engaging in the program; or
  • pursue a civil penalty.

3. Complying with National Employment Standards

In addition to complying with immigration laws, you must also comply with the National Employment Standards (NES) under the Fair Work Act. This is the same Act that governs all employees working in Australia regardless of the employee’s immigration status.

The NES has rules on:

  • the maximum weekly hours of work;
  • requests for flexible working arrangements;
  • leave entitlements;
  • public holidays;
  • notice of termination and redundancy pay; and
  • provision of a Fair Work Information Statement.

Key Takeaways

Overall, there is more to sponsoring foreign workers than just obtaining the required visa. There is an ongoing obligation for you to make sure that your employees comply with immigration laws throughout their employment. Additionally, you must comply with national employment standards that apply to all employers in Australia. Furthermore, as a sponsoring business, you now also need to pay the Skilling Australians Fund (SAF) levy which makes it more expensive to sponsor overseas employees. If you have any questions about sponsoring a foreign worker, you can contact LegalVision’s immigration lawyers on 1300 544 755 or fill out the form on this page.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.
Natasha Bahari

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