Plain English Guide to Sponsoring Skilled Staff from Overseas

If your business is having difficulty recruiting skilled staff from within the Australian labour market, you may wish to consider sponsoring suitably qualified and experienced staff from overseas.

Prior to commencing the sponsorship process it is important that employers secure proper advice. This advice needs to address not only specific The Department of Home Affairs (DHA) (previously the Department of Immigration and Border Protection [DIBP]) application processing requirements, but also a number of broader issues such as:

  • the sponsor's obligations in relation to minimum salary and employment conditions;
  • whether the DHA is likely to determine that the nominated occupation is genuine; and 
  • whether the visa applicant is sufficiently qualified for the nominated occupation. 

There are a number of visa programs in place which are designed to assist Australian businesses to obtain overseas staff to meet specific skill shortages in Australia. The most common employer sponsored visa is the Temporary Skills Shortage (TSS)(subclass 482) visa. The TSS visa replaced the Temporary Work (Skilled)(subclass 457) visa (commonly known as the "457 visa") on 18 March 2018. 

There are many benefits to be gained from recruiting overseas staff, over and beyond the satisfaction of an immediate demand for skilled labour. There are the added benefits of obtaining new or enhanced skill sets, new ideas and an understanding of, and access to, new markets.

What options are available to sponsor overseas staff?

There are options to sponsor staff directly from overseas or to sponsor non-Australians who might already be working, studying or visiting in Australia on other types of visas. Staff may be sponsored on either a temporary basis or permanently. If you initially sponsor staff on a temporary basis, you may be able to subsequently sponsor them on a permanent basis, depending on the role which they are nominated to perform. 

1. Temporary Skills Shortage (TSS)(subclass 482) visa 

The TSS visa allows highly skilled personnel to come to Australia to work for an approved employer for up to either two or four years. The length of the visa will depend on the nominated occupation. The nominated occupation must be on one of two lists issued by the DHA - the Short Term Skilled Occupation List (STSOL) or the Medium and Long Term Strategic Skills List (MLTSSL)

Visas for occupations on STSOL may be issued for either one or two years, whereas visas for occupations on MLTSSL can obtain visas for up to four years. 

To nominated a skilled worker for a TSS visa, the prospective employer must first apply to become a standard business sponsor.

The standard business sponsorship

In assessing business sponsorship applications, the DHA looks mainly at whether the company is actively trading and has the financial ability to meet sponsorship obligations.

Overseas businesses that are not operating a business in Australia, can also sponsor an employee to work in Australia but only if the purpose of the employee working in Australia is to:

a) assist in establishing a business operation in Australia for the employer; or
b) assist in fulfilling, a contractual obligation of the employer. 

Applicants for business sponsorship are also required to prove that they have a strong record of, or a demonstrated commitment to, employing local labour, have non-discriminatory employment practices, and have no adverse information recorded against them or anyone related to them. 

Sponsorship obligations

Under the terms of an approved business sponsorship, the company must ensure that sponsored employees are provided with terms and conditions of employment no less favourable than those which would be provided to an Australian citizen or permanent resident. Adherence to these obligations is paramount and continually monitored by the DHA, even after the visa application for a nominated position has been approved. Breaches of these obligations can result in warnings or civil penalties. 

The obligations include notifying the DHA of relevant changes, including changes to the company structure or solvency, and changes to the sponsored person's employment. The employer must keep records of compliance with sponsorship obligations, cooperate with the DHA and its investigators in any investigation of potential breaches and pay reasonable travel costs associated with the sponsored employee, including costs of removal from Australia should they become unlawful. 

Once the sponsorship is approved, it is generally valid for 5 years. 

The nomination:

If the employer is approved as a standard business sponsor, the next step is to lodge a nomination application for the position that needs to be filled. In addition to the position needing to be on the STSOL or MLTSSL, the DHA will need to be satisfied that the following criteria are met. 

Market salary

A sponsor must show that the market salary for the position being nominated is at least the amount specified by the Temporary Skilled Migration Income Threshold (TSMIT). The TSMIT is currently specified as $53,900pa (as at 1 July 2018) base salary (not including superannuation). 

If the sponsor has an Australian employee performing similar work, the sponsor has to demonstrate that the salary for the nominated position will be at least equivalent to that of the similar Australian employee. 

If there are no Australian employees performing similar work, the sponsor will need to prove market salary by reference to remuneration surveys, published earnings data or evidence of what employees are paid in similar workplaces.

There are additional salary requirements for some occupations.

Genuine position

The DHA must be satisfied that the nominated position is a genuine position, having regard to the size and organisational structure of the business, where the proposed applicant will fit, whether the applicant is currently in Australia and whether they have previously applied for a variety of visas to try to stay in Australia. 

Labour market testing

The DHA must be satisfied that the company has tried to fill the nominated position with an Australian citizen or permanent resident. Some countries and occupations may be exempt from labour market testing. 

Skilled Australia Fund 

The DHA also requires standard business sponsors to support Australian workers by contributing to the Skilled Australia Fund (SAF). The SAF levy will be dependent on the proposed length of the visa, and on the company's turnover. The formula is Base amount x visa period, where the base amount is $1,200 if the annual turnover is less than AU$10,000,000, or in any other case, $1,800. 

For example, if the company's annual turnover is less than AU$10,000,000, and the occupation is on the MLTSSL and the company proposes to employ the applicant in the nominated position for 4 years, the SAF levy will be $4,800. 

The SAF levy is non-refundable, even if the nomination application is refused. 

The visa:

Once the nomination for the position is approved, the next step is to lodge the visa application. The TSS visa applicant will need to meet, amongst other things, the following requirements:

  • English language proficiency equivalent to an International English Language Testing System (IELTS) test score of at least 4.5 in each of speaking, reading, writing and listening, with an overall score of at least 5;
  • proof they have the required skills for the occupation, which may include completing a skills assessment ;
  • they and any migrating family members meet character and health requirements; and
  • maintaining private health insurance for their stay in Australia.

2. Permanent Staff

The Employer Nomination Scheme (ENS)(subclass 186) visa has been developed for Australian employers to recruit permanent, highly-skilled staff from overseas (or temporary residents currently in Australia), when they have been unable to fill a vacancy from within the Australian labour market or through their own training programs.  The ENS process also requires a nomination application and a visa application. 

The nominated position must be:

  • full-time and available for at least two years;
  • in accordance with the standards for working conditions provided under Australian industrial laws including salary; and
  • on MLTSSL.

The nominee must apply under one of the three streams:

  • the Temporary Residence Transitional Stream is for subclass 457 or subclass 482 (TSS) visa holders who have worked in Australia on their visa for 3 out of the last 4 years in the nominated occupation;
  • the Direct Entry Stream is for people who have not, or only briefly, worked in Australia; 
  • the Agreement Stream is for people sponsored by an employer through a labour or regional migration agreement.

Under the Temporary Residence Transitional stream, the nominee must:

  • be under the age of 45 years at the time of application;
  • provide evidence of an IELTS score, or equivalent, of at least 6 in each of listening, reading, writing and speaking (or of have completed 5 years full time secondary or tertiary education in English); 
  • hold any required occupational licence, registration or membership at the time of the application; and
  • together with any migrating family members, satisfy mandatory character and health requirements.

The importance of an employment contract

When sponsoring an employee from overseas, it is important that the employer has in place an appropriate employment contract prior to commencement. There are a number of areas that must be covered in the contract and it is best to seek advice from your lawyer to ensure you have considered the full range of issues.

Coleman Greig can help you with:

  • advice on the various visa options available;
  • advice regarding the sponsorship process and your obligations as a sponsor;
  • preparing and lodging applications and supporting submissions;
  • liaising with Human Affairs;
  • tracking and managing the progress of your visa applications; and
  • advice on preparing employment contracts.

For more information on sonsoring skilled staff from overseas, please contact our Migration team in ParramattaPenrith and Norwest.