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 Immigration and Border Protection (DIBP) application processing requirements, but also a number of broader issues such as sponsor’s obligations in relation to minimum salary, superannuation and medical costs for the sponsored workers and the value of well structured employment contracts.

DIBP has 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. 

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-Australian persons who might already be working, studying or visiting in Australia on other types of visas. Staff may be sponsored on either a temporary basis (for up to four years) or permanently. If you initially sponsor staff on a temporary basis, you are generally able to subsequently sponsor them on a permanent basis.

1. Temporary Staff

The Temporary Work (Skilled) Visa/subclass 457 allows highly skilled personnel to come to Australia to work for an approved employer for up to four years. The prospective employer must first apply to become a standard business sponsor.

Once a Sponsorship has been approved, the company is able to nominate positions to be filled by overseas employees and the overseas employees are able to apply for a Visa.

In assessing Business Sponsorship applications, DIBP looks at two main issues: whether the business is lawfully and actively trading and has the financial ability to meet the required sponsorship obligations in relation to any employees sponsored; and whether the company is able to demonstrate that it meets prescribed benchmarks for the training of Australian Citizens and Australian permanent residents. Applicants for Business Sponsorships are also required to attest in writing that they have a strong record of, or a demonstrated commitment to, employing local labour and having non-discriminatory employment practices. Once approved, a Sponsorship is valid for 3 years. There is no limit placed on the number of nominations that can be made under an Approved Sponsorship and the term of the Approved sponsorship may be amended (eg, extended) by application.

Under the terms of an Approved Business Sponsorship, a company will become subject to a set of legal Sponsorship Obligations in relation to sponsored employees. Adherence to the Sponsorship Obligations is monitored by DIBP and breaches of the Obligations can result in a range of warnings, sanctions or civil penalties. Details of the specific Obligations follow and you should read these carefully. Should you have any questions in relation to the Obligations, please contact our Immigration team.

While the specific job titles assigned to positions being nominated under an approved Sponsorship are at the sponsoring company’s discretion, Nominations can only be approved for occupations which are among those listed in a specified Legislative Instrument, know as CSOL.

In relation to Nomination assessment, Sponsors are required to show that the market salary rate (the amount that is paid to equivalent Australians in the employer’s workplace) for the position is at least the amount specified for the Temporary Skilled Migration Income Threshold (TSMIT). If the market salary rate for an occupation is lower that the TSMIT, a Nomination will not be approved, even if the salary offered is higher than TSMIT. This is to stop employers artificially inflating salaries to secure approval for positions requiring lower skill levels. As part of the assessment process, DIBP will request details of relevant industrial arrangements that apply to Australian employees performing similar work in the workplace. If there are no Australians performing similar work in the workplace, the sponsor will need to demonstrate the market salary rate by reference to remuneration surveys, published earnings data or evidence of what employees are paid in similar workplaces, etc.

For the Visa application assessment, Visa applicants are required to demonstrate that they have the necessary skills and experience to fill the nominated position.

All primary 457 visa applicants must meet an English language requirement, unless they have been nominated for a position that does not require English language for licensing or registration or they are exempt from the requirement in specified circumstances.

Some Visa applicants for trade occupations and coming from certain countries may be required to undertake a formal skills assessment process before being eligible to apply for a visa.

As a criterion for the grant of a subclass 457 Visa, all applicants must provide evidence that they hold appropriate private health insurance cover for themselves and their family members or that they are covered by Reciprocal Health Care Arrangements between their home country and Australia. Visas are then granted with a condition that the visa holder must maintain health insurance cover for the duration of their stay in Australia.

What are my obligations as a 457 sponsor?

An applicant for approval as a standard business sponsor of a temporary business long stay visa applicant must agree to certain Sponsorship Obligations.

Obligation to cooperate with inspectors

The standard business sponsor must cooperate with inspectors appointed under the Migration Act 1958.

Obligation to ensure equivalent terms and conditions of employment

The standard business sponsor must ensure that the terms and conditions of employment provided to a primary sponsored person are no less favourable than the terms and conditions the person provides, or would provide, to an Australian citizen or Australian permanent resident to perform work in an equivalent position in the person’s workplace at the same location.

Obligation to pay travel costs to enable sponsored persons to leave Australia

The standard business sponsor must pay reasonable and necessary travel costs to enable the sponsored persons to leave Australia if the costs have been requested in writing by the department or the sponsored persons, and the costs have not already been paid by the sponsor in accordance with this obligation.

Obligation to pay costs incurred by the Commonwealth to locate and remove unlawful non-citizen

The standard business sponsor must pay costs incurred by the Commonwealth in locating and/or removing the primary or secondary sponsored persons from Australia, if the Minister has requested the payment by written notice. The sponsor is liable to pay the Commonwealth the difference between the actual costs incurred by the Commonwealth (up to a maximum of $10 000) less any amount already paid under the obligation to pay travel costs to enable sponsored persons to leave Australia

Obligation to keep records

The standard business sponsor must keep records of its compliance with the other obligations. All of the records must be reproducible and some must be capable of verification by an independent person.

Obligation to provide records and information to the Minister

The standard business sponsor must provide records or information that goes to determining whether:

  • a sponsorship obligation is being, or has been, complied with; and
  • other circumstances, in which the Minister may take administrative action, exist or have existed
  • on request and in the manner and timeframe requested by the Minister.

Obligation to provide information to Immigration when certain events occur

The standard business sponsor must provide certain information to the department when certain events occur. This information must be provided by registered post or electronic mail, to a specified address and within certain timeframes of the event occurring.

Obligation to ensure primary sponsored person does not work in an occupation other than an approved occupation

The standard business sponsor must ensure that the primary sponsored person does not work in an occupation other than the occupation that is the subject of the most recent approved nomination for the person. If a sponsor wants to employ a primary sponsored person in a different occupation, the sponsor must lodge a new nomination in respect of that occupation for the primary sponsored person.

Obligation not to recover certain costs from a primary sponsored person or secondary sponsored person

The standard business sponsor must not recover, or seek to recover, from the primary or secondary sponsored person, all or part of the costs (including migration agent costs):

  • that relate specifically to the recruitment of the primary sponsored person
  • associated with becoming or being a sponsor or former approved sponsor.

2. Permanent Staff

The Employer Nomination Scheme (ENS) 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 has two stages:

a. nomination by an employer; and

b. the nominee’s application for a visa.

The nomination will be assessed against the following requirements.

The employer must:

  • be actively and lawfully operating in Australia
  • have a genuine need for a paid employee to fill a position in the employer’s business
  • have a satisfactory record of compliance with immigration law and workplace relations law
  • have made adequate provision for training existing Australian employees, or if a newly established business, be making adequate provision for future training of Australian employees.

The position in the employer’s business must:

  • be full-time and available for at least two years
  • be in accordance with the standards for working conditions provided under Australian industrial laws
  • correspond to an occupation on the Consolidated Occupations List (which is published in a Government Gazette Notice)
  • attract a base salary that is at least the minimum salary that has been published in a Government Gazette Notice for the occupation.

To be eligible, the nominee (the potential employee) must apply under one of the three streams:

  • The Temporary Residence Transitional Stream is for subclass 457 visa holders who have worked in Australia on their visa for 2 years out of the last 3 in the nominated occupation (immediately preceding the nomination).
  • The Direct Entry Stream is for people who have never, or only briefly, worked in the Australian labour market.
  • The Agreement Stream is for people sponsored by an employer through a labour or regional migration agreement.

Also, the nominee must be under the age of 50 years at the time of application, the nominee is required to provide evidence of having Vocational English at the time of lodging their application, and the nominee as well as any family members will need to 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 your obligation as a sponsor
  • Planning the sponsorship process
  • Preparing and lodging applications
  • Preparing supporting submissions
  • Liaison with the Department of Immigration and Border Protection
  • Tracking and managing the progress of your visa applications
  • Representation in various Courts and Tribunals
  • Advice on preparing employment contracts

Sponsors are also required to test the local labour market prior to lodging a nomination. This is called Labour Market Testing or LMT and is a crucial requirement of the nomination process. What this means for sponsors is that they must now provide information with their nomination about their attempts to recruit Australian workers and how they have determined on the basis of these attempts that there is no suitably qualified and experienced Australian citizen, Australian permanent resident or eligible temporary visa holder available to fill the position.

For more information, please contact our Business Migration Services team in Parramatta and Norwest.


Disclaimer: The information provided above is a general summary and is not intended to be nor should it be relied upon as a substitute for legal or other professional advice.