457 visa company sponsorship obligations

Company sponsors quite often fail to understand the full implications of the obligations they take on as Standard Business Sponsor approved to nominate 457 visa holders. Often when information is provided by an agent or to in- house HR staff, the information is filed -never to again see the light of day! Regrettably this approach can and does end in tears. Over recent years the Labour government has incrementally tightened up 457 visa program monitoring and with the program set to expand in the next financial year, there is pressure especially from the main unions to increase monitoring.

As a result company sponsors must familiarise themselves with the obligations which they are deemed by law to be subject to by becoming an approved sponsor. I have attached the standard sponsorship document issued by DIAC setting out the list of Obligations which a sponsor must abide by – under threat of sanction for breach.

Current sponsor-obligations

This document is a good guide, but it is important when looking at these obligations, to click through to the links provided in that document as those links contain more information and employers can avoid grief by arming themselves with this information.

The main ones from an everyday standpoint are listed below:

  •     Obligation to ensure equivalent terms and conditions of employment (obligation to market salary usually either shown by  comparing salary of local worker(s) doing same duties viz., site rate – or by objective evidence of market salary in the industry);
  •     Obligation to ensure that the primary sponsored person works in the nominated occupation or activity;
  •     Obligation to keep records. The full list of records required is listed in the following link: Required records;
  •     Obligation not to recover certain costs from a primary sponsored person or secondary sponsored person;
  •     Obligation to provide information to DIAC when certain events occur – including change of duties or cessation of sponsored employee, change in information provided to DIAC (contact and address details), legal status of the sponsoring entity  (receivership or liquidation) and including change of shareholding & directors – A full list of these ‘events’ is listed in the following link: Notifiable events

* Standard Business Sponsors are however required to meet all relevant sponsorship obligations.

Penaties for breach of sponsorship Obligations

To avoid difficulties with DIAC monitoring – particularly dealing with ‘Notifiable events’ – I recommend setting up reporting systems appropriate to the sponsor’s operations or even designated staff to monitor these administrative and practical changes. Not to do so is to run the risk of being sanctioned by DIAC for breach of these obligations if they are monitored. Penalties can include the Minister doing one or more of the following:

  •   To bar the sponsor, for a specified period, from sponsoring more people under the terms of the sponsorship approval
  •   To bar the sponsor, for a specified period, from making future applications for approval as a sponsor
  •   To cancel one or all of the sponsor’s existing approvals as a sponsor
  •   To apply to a Court for a civil penalty order of up to $33 000 for a corporation and $6 600 for an individual for each failure,    or
  •   To issue an infringement notice of up to $6 600 for a body corporate and $1 320 for an individual for each failure.

Please do not hesitate to contact us if you have questions or issues relating to your particular sponsorship obligations or you require advice in responding to monitoring Notices issued by DIAC.

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