Sponsorship obligations for standard business sponsors

immigration lawyer melbourne can help standard business sponsors to understand their sponsorship obligations
If you are a sponsor certain people, do you know your sponsorship obligations?

Sponsorship obligations for standard business sponsors and other sponsors – if you are an approved:

  • Standard business sponsor or a sponsor under a Labour Agreement for TSS 482 visa (click here to learn more about TSS 482 visa); or
  • Professional development sponsor; or
  • Temporary activities sponsor (click here to learn more); or
  • Special program sponsor; or
  • Entertainment sponsor; or
  • Superyacht crew sponsor; or
  • Long stay activity sponsor; or
  • Training and research sponsor

you will have sponsorship obligations that you must adhere.

If you are an approved sponsor, eg, standard business sponsor, you must comply with all your sponsorship obligations (reg. 2.78 to 2.87C). The Australian Border Force (ABF) is responsible for monitoring sponsorship obligations compliance.

Generally, the sponsorship obligations are to ensure that:

  • Working conditions meet Australian standards
  • Sponsored workers are not exploited by their sponsors
  • The visa programs are not abused or used for other purposes
  • The obligations and requirements are standardised.

If you breached your sponsorship obligations, you may be sanctioned, for eg, a civil penalty or being barred or your sponsorship cancelled (under s 140M).

Sponsorship obligations for standard business sponsors and other sponsors include:

  • Cooperating with compliance inspectors (reg. 2.78; apply to UC-457 and TSS 482)
  • Ensure equivalent terms and conditions of employment (reg. 2.79; apply to UC-457 and TSS 482)
  • Pay travel costs to enable the sponsored person to leave Australia (reg. 2.80 – apply to UC-457 and TSS 482)
  • Pay costs incurred by the government to locate and remove sponsored person who has become an unlawful non-citizen (reg. 2.81 – apply to UC-457 and TSS 482)
  • Keep records (reg. 2.82 – apply to UC-457 and TSS 482)
  • Provide info to the Minister (reg. 2.83 – apply to UC-457 and TSS 482)
  • Secure an offer of a reasonable standard of accommodation (reg. 2.85 – apply to some sponsors only)
  • Ensure sponsored person works or participates in nominated occupation, program or activity (reg. 2.86 – apply to UC-457 and TSS 482)
  • Ensure sponsored person works or participates in the activity in relation to which their visa was granted (reg. 2.86A)
  • Not recover, transfer or take actions that would result in another person paying for certain costs (reg. 2.87 – apply to UC-457 and TSS 482)
  • Provide training (reg. 2.87B – apply to UC-457 and TSS 482)
  • Not engage in discriminatory recruitment practices (reg. 2.87C – apply to UC-457 and TSS 482)

Sponsorship obligations – to cooperate with inspectors (reg. 2.78)

As a standard business sponsor or other forms of sponsor, you and your staff must cooperate with compliance inspectors (defined in s 140V). The inspector has power to (under Subdiv F):

  • Enter your premises (s 140XB)
  • Inspect any work, process or object (s 140XC)
  • Interview any persons while on premises or at a place (s 140XC)
  • Require a person to tell them who has custody of, or access to, a record or doc (s 140XC)
  • Inspect and make copies of records or docs (ss 140XC, 140XF)
  • Require a person to tell them the name and address of a person if they reasonably believe that the person has contravened a civil penalty provision (s 140XE)

Sponsorship obligations prevent you from (reg. 2.78(3)):

  • Stopping the inspector with whatever means from doing their job or entering your premises
  • Hiding or removing info or docs
  • Stopping someone from being interviewed
  • Assaulting or intimidating or threatening or stalking the inspector

Sponsorship obligations – to provide equivalent terms and conditions of employment (reg. 2.79)

As a standard business sponsor, your sponsorship obligations include making sure the sponsored person is employed on equivalent terms and conditions or not less favourable as your other Australian resident employees performing equivalent work.

This sponsorship obligation starts from the date your nomination is approved and the sponsored person is granted their visa.

The sponsored person’s remuneration must match (cannot be less than) the nominated salary at all time (reg. 2.79(3)(b)(i)). In addition, the gross earnings must not be less than an equivalent Australian worker (reg. 2.79(3)(b)(ii)).

In addition to earnings, the sponsored person’s employment conditions such as, access to annual leave or sick or personal or maternity leave, must not be less favourable than an equivalent Australian worker (reg. 2.79(3)(b)(iii)).

If you are a standard business sponsor, you must not ask your sponsored employee to work part-time because their earnings or terms and conditions of their employment will less favourable when the nomination was approved even your business has declined or there is a change in business structure or the personal preference of the visa holder. Unless it is in connection with after maternity leave or sick leave or significant personal reasons.

You should not allow extensive leave without pay or LWOP as the sponsored person’s earnings will be less that what the earnings were when the nomination was approved. Unless it is for maternity/paternity leave, sick leave or significant personal reasons. And it should not exceed 3 months unless the LWOP is under Australian workplace laws. The LWOP must be in writing and approved by you. LWOP may be in breach of visa condition 8107 – not cease or change work and 8607 – approved work only.

As a part of your sponsorship obligations, you must pay your sponsored employee the appropriate Superannuation otherwise you may breach reg. 2.92 for contravention of law.

If you pay your sponsored employee in overseas currency, you must adjust for any fluctuations in the exchange rate.

You must also comply with all federal and state or territory laws at all times. Failure to comply may result in sponsorship cancellation or barred under reg. 2.92.

Sponsorship obligations – pay travel costs

As a standard business sponsor, you are required to pay the travel costs of your sponsored employee (including their dependents) to leave Australia if a request is made in writing (reg. 2.80). You are only required to pay, even if they arrived in Australia but did not commence working for you or leave their job for whatever reason, for a one way economy class ticket to the country of their passport.

Sponsorship obligations – pay government to locate and remove

If your sponsored employee leaves their job and choose to become an unlawful non-citizen, you may be required to pay up to $10,000 (any costs incurred, and the Department may ask the unlawful non-citizen to pay) to the government to locate and remove them from Australia (reg. 2.81). You must take steps to make sure your sponsored employee leaves the country after finishing employment with you. You should pay for their return trip home (reg. 2.80) and notify the Department that they have stopped working for you.

This obligation ends 5 years after the unlawful non-citizen departed Australia.

Sponsorship obligations – to keep record

You must keep records to demonstrate compliance with your sponsorship obligations (reg. 2.82). All records (as specified in reg. 2.82(2)(aa)) must be kept in a reproducible format and kept for 5 years.

As an approved standard business sponsor, you must keep record of:

  • Money paid to the sponsored person
  • Money applied or dealt with on the sponsored person’s behalf
  • Agreed non-monetary benefits provided to the sponsored person
  • Terms and conditions of employment of equivalent workers in your company
  • Tasks performed by the sponsored person and the location(s)
  • Contract of employment
  • Training requirements

It is recommended that you should not pay by cash as it may not be verifiable. This obligation ends 2 years after you ceased to be a standard business sponsor, or the sponsored person is no longer employed by you.

Sponsorship obligations – provide records and info to the Minister

As a standard business sponsor, you must, when requested in writing, provide records or info to the Department in specified circumstances (reg. 2.83).

The records or info that can be requested are:

  • Records that are kept under a law (commonwealth or state/territory);
  • Records that are kept under reg. 2.82 (obligation to keep records);
  • Records or info relating to the administration of Div 3A or Part 2 (sponsorship provisions)

You are usually given 14 calendar days to provide. Failing to provide will mean you have breached your obligation to keep records (under reg. 2.82).

The Department may also request records from a third party under the powers of an inspector (under s 140XC or 140XF).

Sponsorship obligations – provide info to Department when certain events occur

You are required (under reg. 2.84) to inform the Department within 28 calendar days when:

  • Your sponsored employee stopped working for you (reg. 2.84(3)(a));
  • There is a change of work duties of your sponsored employee (reg. 2.84(3)(aa))
  • There is a change to your info as a sponsor or to the training requirement (reg. 2.84(3)(b)(i)(C)).
  • There is a change to your contact details when applying to be a sponsor
  • Your legal entity ceased to exist (reg. 2.84(3)(d))
  • You paid return travel cost to your sponsored employee to leave Australia (reg. 2.84(3)(h))
  • You become insolvent, bankrupt or gone into administration or other significant financial changes (reg. 2.84(3)(i), (j), (k) and (l))
  • There is a new partner (reg. 2.84(3)(f)) or director (reg. 2.84(3)(e)) or member to the managing committee (reg. 2.84(3)(g)) is appointed

You have 28 calendar days to notify the Department if any of the above occurred.

Sponsorship obligations – ensure works or participates in nominated occupation, program or activity

You must make sure your sponsored employee does not work in an occupation or program or activity other than those approved in the nomination. Your sponsored employee may also breach visa condition 8607 – approved work only.

In addition, your sponsored employee can only work for you as an employee (reg. 2.86(2A)(e)). If they, whether you are aware or not, work for someone else or they work on their day off or after hours or on holidays you will still beach reg. 2.86.

Your sponsored employee may work for your associated entity (as defined by reg. 1.03 and s 50AAA of the Corporation Act 2001).

You should also note that if your sponsored employee’s occupation has an occupation caveat (eg, turnover or number of staff) and if you no longer able to meet the caveat, then you may have breached reg. 2.86(2)(a) and they may be working outside their nominated position. Their duties must correlate with the duties listed on the nominated occupation under ANZSCO, not according to their employment contract or position or duties statements. Work that is incidental or supports the nominated occupation will satisfy reg. 2.86.

If you promote your sponsored employee or there is a change in their roles, but the tasks or skill level are still within the approved occupation’s ANZSCO code, then you do not need to make a new nomination application. However, you must notify the Department of the change in duties to satisfy reg. 2.84(3)(aa).

You cannot on-hire your sponsored employee to anyone who is not an associated entity unless it is allowed by a legislative instrument.

Your cannot engage the sponsored person as an independent contractor (eg, a GP) unless allowed by a legislative instrument,

You may allow your sponsored employee to work in a temporary higher duty job for less than 2 months if they agreed and you notify the Department (reg. 2.84(3)(aa)). If the duration is more than 2 months, you must lodge a new nomination.

Sponsorship Obligations – not to recover, transfer or take action to recover certain costs

Under reg. 2.87, you must not:

  • Take, or seek to take action to recover costs associated with becoming a sponsor or recruitment of your sponsored employee or nominating the sponsored person
  • Require another person to pay for the costs of becoming a sponsor or recruitment of your sponsored employee or nominating the sponsored person

Costs include:

  • Cost of sponsorship and nomination charges
  • Migration agent costs associated with the lodgement of the sponsorship and nomination applications
  • Migration agent fees or legal fees associated with sponsorship monitoring
  • Administrative costs and other costs incurred for the recruitment of the sponsored person
  • Training of new staff
  • Pre-agreed costs, eg, airfares to Australia, visa application costs and moving assistance
  • Training requirement costs
  • Costs associate with recruiting the sponsored person

Cannot ask or give a benefit for sponsoring

You must not ask for a benefit (s 245AQ – benefit includes (a) a payment or other valuable consideration; (b) a deduction of an amount; (c) any kind of real or personal property; (d) an advantage; (e) a service; (f) a gift) for sponsoring the sponsored person. And the sponsored person must not give a benefit for being sponsored (s 245AR – cannot ask or receive a benefit for a sponsorship related event or may incurred an imprisonment of 2 years or 360 penalty units or both – an offence or liable to a civil penalty of 240 penalty units). Your sponsored employee cannot offer you a benefit in return for sponsoring him or her (s 245AS – civil penalty of 240 penalty units). As an executive of your company you may also be held liable (s 245AT – 360 penalty units or under s 245AU if you know or was reckless or negligent to the asking of a benefit – 240 penalty units, because you must take reasonable steps to prevent the contravention).

Sponsorship obligations – providing training

As an approved standard business sponsor (for UC-457 visa only), you must contribute to the training of Australian workers during each year you sponsored overseas worker on a subclass 457 (reg. 2.87B).

You must also keep record of your compliance under reg. 2.83(3)(g).

Sponsorship obligations – not to engage in discriminatory recruitment practices

As an approved sponsor, you must not engage in discriminatory recruitment practices for the duration of your sponsorship.

Discrimination on grounds of sex, gender, race, social group or pregnancy is not part of this obligation (reg. 2.87C) but come under Fair Work or Human Rights.

Discriminatory recruitment practice is defined (in reg. 2.57(1)) as practice that directly or indirectly discriminates against a person based on their immigration status or citizenship.

Indirect discrimination is when you have an unreasonable rule or policy that has an unfair effect on people who share a particular attribute. For eg, placing an ad in a Vietnamese newspaper and advertised in Vietnamese (where Vietnamese language proficiency is not required). Similarly, you cannot hire people from one country or majority from overseas countries or giving preference to certain countries or visa status.

Sanctions for failing sponsorship obligations

The ABF may impose the following sanctions if you breached your sponsorship obligations:

  • Formal warning letter
  • Barring you from sponsoring (s 140M)
  • Cancelling your sponsorship (s 140M)
  • Enforceable undertaking in a court (s 140RA)
  • An infringement notice (s 506A and Div 5.4)
  • Civil penalty order (under Part 8D)
  • A letter reminding you of your sponsorship obligations (does not constitute an adverse info for immigration purposes)

Your sponsorship may be cancelled, or you may be barred as a sponsor (s 140M) under the following prescribed situations (s 140L):

  • Failing to meet your sponsorship obligations (reg. 2.89)
  • Provide false or misleading info (reg. 2.90)
  • Do not meet the application or variation criteria (reg. 2.91)
  • Breached a law (reg. 2.92)
  • Making unauthorised change to professional development program or special program (reg. 2.93)
  • Failing to pay additional security (reg. 2.94).
  • Failing to comply with certain terms of special program agreement (reg. 2.94A)

Types of failure to comply with sponsorship obligations

  1. Minor failure:
    1. No detrimental effect on the sponsored person or on the Department’s capacity to monitor you
    1. Does not undermine the integrity or intent of the visa programme
    1. No negative impact on Australia or Australian citizens and PRs
    1. Immediately rectified the failure
    1. Failure was unintentional

Multiple failures will not be considered as minor.

  • Significant failure
    • Has detrimental effect on the sponsored person
    • Affects the Department’s capacity to monitor you
    • Your negligence or reckless conduct
    • History of failures
    • Previously been educated by the Department of your sponsorship obligations
    • Negative impact on Australia or Australian citizens and PRs

Multiple minor failures may be considered as a significant failure

  • Serious failure
    • Failure that is systematic, calculated or deliberated abused of the skilled migration programme
    • Threats, coercion or intimidatory behaviour directed toward the sponsored person or the inspector
    • History of repeated failures
    • Inhibited the Department’s capacity to monitor you
    • Recurrent contravention against the sponsored person
    • Displaced Australian citizens and PRs from employment opportunities
    • Involved large underpayments or significant recovery of costs.

Australian migration law is complex and difficult to understand, contact our immigration lawyer for a free 15 minutes consultation to help you understand your sponsorship obligations or click here to find your answers.

041 222 4020 or WeChat: AUDvisa

This article is not intended to be or taken as migration legal advice. The author of this article disclaims any liability for any action or omission on the information provided or not provided in this article. You should always consult an immigration lawyer or a registered migration agent to form an informed opinion on your immigration matter.

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