Obligations as a Standard Business Sponsor for 457 Visa Holders
A sponsor’s role doesn’t end when the visa is granted. Their obligations continue so long as there is a 457 visa holder in their employment and through the SBS validity period.
The sponsorship obligations framework exists to ensure that the sponsored persons are not exploited and working conditions meet Australian standards, that visa programmes are not abused as a means of entry and not based on genuine need, and that obligations across all sponsors are standardised.
What happens if you don’t meet a sponsor does not meet their obligations? They might be issued an official warning letter, barred from being sponsor, their approval as a sponsor may be cancelled, they might be served and infringement notice or
The obligations facing a Standard Business Sponsor (SBS):
- Cooperate with inspectors
- Ensure equivalent terms and conditions of employment
- Ensure primary sponsored person works or participates in nominated occupation
- Pay travel costs to enable sponsored persons to leave Australia
- Pay costs incurred by the Commonwealth to locate and remove unlawful non-citizen
- Not to recover, transfer or take actions that would result in another person paying for certain costs
- Provide training
- Provide information to Immigration when certain events occur
- Keep records
- Provide records and information to the Minister
- Not engage in discriminatory recruitment practices
Obligation to cooperate with inspectors
The sponsor and any employee of the sponsor with actual or apparent authority is required to cooperate with an official inspector. The inspector has the right to:
- Enter premises
- Inspect any work, process or object
- Interview persons while on premises or at a place
- Require a person to tell the inspector who has custody of, or access to, a record or document
- Require a person to produce a record or document
- Inspect and make copies of records or documents
- Require a person to tell the inspector the person’s name and address, if the inspector reasonably believes that the person has contravened a civil penalty provision
Breach of this obligation can only occur by the non cooperation of the sponsor or employee with actual or apparent authority. Non cooperation with the inspector includes hindering and obstructing, concealing or attempt to, prevention of access to persons or documents, or the assertion of influence on another person to provide inaccurate information, and assault and intimidation.
Obligation to ensure equivalent terms and conditions of employment
Sponsored persons are to be provided with ‘terms and conditions that are no less favourable than that provided to, or would be provided to Australian citizens or permanent residents performing equivalent work in the same workplace and location (market salary rate)’. This 457 nomination requirement is also an obligation after the 457 applicant receives their visa grant. It basically means that all agreements made for the purposes of the visa application continue to be upheld after its grant.
Learn more about Market Salary Rate
In our last article, the DIBP tackled some questions surrounding changes in remuneration and hours of work after the visa grant, and how to stay within the lines of this obligation.
Part time work
457 nominations generally cannot be approved for part time work unless the conditions of market salary rate and Temporary Skilled Migration Income Threshold (TSMIT) requirements continue to be met despite the hours of work not being full time.Part time arrangements may also be approved where nominated earnings are at least $250,000. Labour agreements cannot be approved for part time work as the labour agreement is restricted to full time arrangements.
Change in circumstances
A reduction in hours after the grant of the visa will result in a reduction in earnings which equates to a breach in conditions, as sponsors are obligated to provide the terms and conditions of employment offered and approved at the application stage.
It is reasonable for hours to be reduced only (perhaps the applicant is returning from maternity leave) when the hourly rate of the approved nominated salary is not reduced and they are still paid at market salary rate, the roles and duties remain the same, and this arrangement is mutually agreed (written evidence) upon by both the sponsor and the visa holder.
Part time arrangements may also be approved where nominated earnings are at least $250,000. Labour agreements cannot be approved for part time work as the labour agreement is restricted to full time arrangements.
Change in salary
A 457 visa holder’s salary may increase, and must, should market salary rate rise in this time, as the sponsor is obligated to maintain a salary that is no less than equivalent to what an Australian worker would receive for the same work in the same location. However should the market salary rate fall, the 457 visa holder’s hourly rate at well as annual rate cannot follow this decrease, as the sponsor is also obligated to maintain pay at promised at nomination stage.
A decrease is permissible where the visa holder was earning $250,000 or more.
Read the rest of the article.
Obligation to ensure primary sponsored person works or participates in nominated occupation
The 457 visa programme seeks to ensure that foreign labour is employed to Australia to fill gaps in the labour market. As such it is vital that the applicant works in the approved nominated occupation. It is an obligation on the sponsor to make sure that the majority of the roles and responsibilities carried out by the 457 holder are clearly within those stipulated under that occupation’s ANZSCO code description. Ad hoc duties are commonplace and such duties will not be penalised.
Promotions and slight variations (movements between occupations under the same ANZSCO occupation group) are also acceptable, but the Department must be notified of such alterations. In the event the roles and responsibilities are substantially different, a new nomination is required to be lodged.
The 457 holder can only work for their sponsor for which their visa has been approved. The sponsor is in breach of this obligation should the 457 holder step outside the lines, whether or not the sponsor is aware.
Obligation to pay travel costs to enable sponsored persons to leave Australia
If the 457 visa holder or secondary 457 visa holder (dependent) requests for travel costs to be paid for for them to leave Australia, the sponsor is obligated to assume these costs. The reasons for the 457 holder’s departure has no leverage affecting this obligation. The costs must be reasonable and necessary.
When making such a request, information on who requires the travel and where the travel is to is required. Costs may include travel from their usual residence in Australia to the nearest international airport and one way flight costs that are the equivalent of economy class travel. Excess baggage and freight costs are not included. The sponsor is obligated to pay these costs within 30 days of receipt of the request.
If the 457 visa holder has already paid for travel costs and is the 457 visa has not yet expired, the sponsor is required to reimburse him for travel costs including airfare equivalent to economy class travel.
The sponsor is required to keep record of having satisfied this obligation if it has come to call, and also fulfils the obligation to keep records (see below).
Did you know?
A 457 visa holder who is departing Australian permanently is able to recover their superannuation. If you have already departed and want your 457 to be cancelled to access these funds can email email@example.com
Obligation to pay costs incurred by the Commonwealth to locate and remove unlawful non-citizen
Should a 457 visa holder decide to stay on in Australia after the validity of their 457 visa has ceased and the government incurs costs in locating and removing the now unlawful non-citizen, the sponsor is obligated to pay the costs back to the government. The costs are capped at $10,000. The government will need to provide written notice to retrieve these costs.
Costs to remove the unlawful non-citizen that exceed $10,000 will be split between the sponsor and the unlawful non-citizen, with the sponsor footing the full $10,000, and the sponsor paying the excess.
If the employer has already made efforts to assist the person is departing Australia i.e. paid for travel costs to leave, this amount will be deducted from the total fee owed to the Government.
Obligation not to recover, transfer or take actions that would result in another person paying for certain costs
Costs that cannot be recovered / transferred (in any manner) include:
- Cost of sponsorship and nomination charges
- Migration agent costs
- Administrative costs (e.g. recruitment exercise /advertising / agent)
- Costs associated with screening of candidates, interviews, reference checks (internal or outsourced)
- Salaries of recruitment or human resources staff
- Training costs including those associated with meeting training benchmarks
- Agreed costs in attracting the 457 holder to move to Australia (e.g. flights)
- Other travel costs between the sponsor and 457 holder
Obligation to provide training
It is an obligation for a sponsor to fulfil either training requirement A or B in every year that they are approved as a sponsor and in that period, has a sponsored 457 visa holder. The obligation occurs in twelve month periods from the date of approval as a sponsor. If within the twelve month period, there is no sponsored 457 visa holder, the sponsor is not required to meet training benchmarks.
This is also a requirement that must be satisfied for ‘next stage’ Temporary Residence Transition (TRT) stream Employer Nominated Scheme (ENS) visa (subclass 186) application.
Learn more about training requirements for TRT stream
Obligation to provide information to Immigration when certain events occur
The sponsor must give notice to the Department (DIBP) when the following events take place:
- Cessation of the 457 holder’s employment
- Changes in the 457 holder’s roles and responsibilities
- Changes in information in what was provided in the sponsor’s SBS application in relation to: training requirement, addresses and contact details
- If the legal entity of the sponsor ceases to exist
- The sponsor has paid for return travel costs for the 457 holder’s departure from Australia
- The sponsor has become insolvent / liquidated / bankrupt / experiencing severe financial turmoil
- New partners, directors and members to managing committee
The Department must be notified within 28 days upon the occurrence of any of these events. Correspondence can be sent to firstname.lastname@example.org.
Obligation to keep records
The sponsor is required to keep records demonstrating that they have been in compliance with their sponsorship obligations. Records must be kept in a reproducible format and need to be kept for at least 5 years.
Records to be kept:
- Return travel costs
- Equivalent terms and conditions of employment
- Written employment contract
- Training requirement
Return travel costs
Documents that should be kept are travel requests and evidence of payment or reimbursement. The documents need to contain sufficient detail to prove that the obligation was carried out correctly.
The sponsor is required to update the Department (DIBP) of any events (see above) occur. Records on how and when the communication occurred must be kept.
Equivalent terms and conditions of employment
In fulfilling the obligation to ensure equivalent terms and conditions of employment (market salary rate). This includes records of money paid to the 457 visa holder, non-monetary benefits and agreements concerning remuneration, terms and conditions provided to equivalent workers within the workplace, records of tasks performed by the 457 holder and details surrounding where these tasks were performed. Because of this, cash payments are in breach of this obligation as it cannot be verified.
Written employment contract
Employment contracts between the 457 visa holder and the sponsor must be kept.
All records surrounding training expenditure must be kept (see above)
Obligation to provide records and information to the Minister
Should the Department require that records are provided, the sponsor is obliged to comply. Generally, the sponsor must respond to the request within 14 calendar days from receipt of the request. Extensions may be applied for on reasonable grounds. Provided only a portion of the requested records and information may also result in the sponsor being in breach of their obligations.
Obligation not to engage in discriminatory recruitment practices
A commitment to local labour must be evident. The sponsor is not to show preference to certain citizenships or visa statuses in interviewing and hiring practices, or advertise positions visa mediums only open to people of certain citizenships (e.g. foreign / foreign language platforms / platforms used solely by those residing outside of Australia). The recruitment process must be a competitive one.
Intra-company transfers, internal recruitment and promotion within Australia and renomination of a current 457 visa holder are situations where the applicant is not in breach with visa conditions.
Under specific circumstances labour market testing is part of the requirements for a successful 457 nomination application.
Learn more about Labour Marketing Testing (LMT)
The DIBP may choose to investigate further if there is cause for suspicion, for example, the current staff profile leans heavily toward foreign labour, if a large number of visa holders (regardless of subclass) are predominantly of the same nationality, if any allegations against the company are made or termination of workers to for these positions to be filled by workers from the same country. Discretion is practiced; the DIBP will take into account the nature of the business in gauging if discriminatory practices are afoot. Businesses that require that its employees speak a certain language, or skills and experience required for the business to run that tends to be generated from a particular country or region will not be penalised.
The obligations that fall upon a sponsor are extensive, and indeed far more than either sponsor or 457 visa holders realise. Due to the subjective nature of the employer-employee relationship, it is important for the concerned party (or better yet, both parties) to have a conversation with an experienced professional.
A 457 visa holder may take leave without pay for extended periods of time (generally up to 12 months) as long as both the sponsor and the visa holder have both agreed to this in writing. 457 visa holders on approved unpaid leave are not considered to be in breach of Condition 8107 provided that they do not perform any work for an employer other than the sponsor.