457 Visa: An expert guide on complying with the new working regulations

Please note!
As of March 2018, the 457 visa was officially abolished and the Australian government introduced the new employer-sponsored work visa called Temporary Skills Shortage visa, also known as TSS visa. Read the information in our updated article carefully to familiarise yourself with the main changes.

With the abolition of the 457 visa, it’s important to understand the new rules and regulations for sponsoring foreign workers. If you don’t, your business risks potential sanctions and heavy fines.

Immigration law experts explain how to ensure you are meeting your sponsorship obligations.

New rules with tougher enforcement

By March 2018, the Temporary Skill Shortage (TSS) visa will have completely replaced the 457 visa.

The government is rolling out the new rules and regulations in stages, and Prime Minister Malcolm Turnbull has said the system will be “manifestly, rigorously, resolutely conducted in the national interest”.

Taskforce Cadena is the division of the Department of Immigration and Border Protection (DIBP) responsible for enforcing sponsorship obligations. They will be sharing information with other government agencies to uncover suspicious activity.

“Businesses can be monitored at any time – and not only by DIBP officers, but also by Fair Work officers and the ATO,” says Stephanie Li, Director and Principal Registered Migration Agent at Forward Migration.

“The DIBP is promoting the fact that these agencies are sharing data to keep sponsors and visa holders alert to the fact that they are being monitored.”

Sponsoring businesses face tough penalties for not meeting their obligations.

They can be issued with an infringement notice or civil penalty order, barred as sponsors for up to five years, have their sponsorship rights cancelled, and/or be invited to enter an enforceable undertaking to ensure that the cause of the failure has been rectified.

Infringement notices, which have recently increased, can be to up to $16,200 for a body corporate (e.g. a company) or $3,240 for an individual (e.g. a sole trader) for each failure. Civil penalties can now be up to $81,000 for a body corporate or $16,200 for an individual for each failure.

“The DIBP will also commence publishing details of sanctioned employers in a bid to publicly ‘name and shame’ sponsors not meeting their obligations,” says Li.

The importance of establishing internal process for compliance

Both Li and Webster are keen to stress businesses that establish an internal process for compliance are less likely to breach their sponsorship obligations, and may be looked on more favourably in terms of enforcement actions if they were to violate the new laws.

And with the possibility of such tough penalties, you don’t want to be caught off guard by Taskforce Cadena.

“As registered migration agents, we have been approached by many businesses that did not have an internal compliance process and, upon being monitored, were found to be in breach of their sponsorship obligations,” says Li.

“When deciding on a sanction, the DIBP will take into account the intent of the sponsor, the number of times the sponsor has failed to meet the obligation, the impact of the failure, and whether there are multiple sponsorship obligation failures.

“Sponsors will be invited to present their argument in regards to the breach, and advise of any process they may have in place to rectify the failure. The DIBP will then assess each case on its own merit and decide whether or not a sanction should be applied.”

Steps for complying with the new regulations

According to Mark Webster, Founder and Managing Director of Acacia Immigration Australia, the TSS visa will work in a similar way to the 457 in terms of compliance obligations.

“You’ll still need to make sure you’re paying the person the right amount, keeping up with your training obligations, maintaining your records, and telling the DIBP if something changes,” he says. “That means changes to position, changes to the salary, changes to the location, changes to the business structure, and so on.”

In light of the government’s toughened stance, Webster suggests businesses take the following steps:

  • Waste no time in conducting an internal audit of your current employees: Step one is to make sure all your current employment agreements are above board. “You have situations where employers assume people are Australian, and it turns out they’ve just lied – they’ve got an Australian accent and everything,” Webster says. “So doing an audit and making sure that everybody who is working for you has the right work rights, absolutely that’s the first step.
  • Do thorough background checks on future employees: “The next step to establish ongoing compliance is you need to check everybody before hiring them,” Webster advises.
  • The regulations apply to all foreign workers, so businesses need processes for both direct hires and people who are recruited by a third party. “If you have contractors or temps working for you,” says Webster, “you should ask the people who are supplying them to confirm that they’ve undertaken checks of the employees before handing them on to your workplace. Because under the new legislation you are liable for contractors and temps as well, even if you’re not directly employing them.”
  • Commit to regularly checking your employees’ visas: Webster explains that following the initial verification, businesses need to continue undertaking regular checks. “You’ve got to be doing ongoing visa checks,” he says. “Checking before you hire somebody is not enough now – you’ve got to make sure you have a schedule of checking regularly after you’ve signed them on as an employee. “Someone on a bridging visa could be refused tomorrow, and will then have 28 days to leave the country, so you want to check them once a month. International students should be checked every three months, and a 457 visa holder or the spouse of a visa holder every six months. “And not only that – you’ve got to keep records to show when you’ve checked and what it said, so you can show that to the DIBP if necessary.”
  • Be diligent in your record keeping: “You need a process. You need to keep records to be able to prove that you’ve done the right thing as a business, otherwise, if you’re not putting in suitable processes as a business owner, director or company officer, you could be personally liable under this legislation. That would be considered possibly grounds for personally fining you if there are employees who don’t have appropriate work rights,” explains Webster. “If you can show a record of regularly checking people’s visa status, that is actually the only defence to these new fines that have come in since 2013.”

The information in this 3 part series of articles on our blog should give you a good foundation to understand the recent changes to Australian working visas. From here we encourage you to formulate your own procedure, to ensure your business remains compliant.

If you’d like to know more about CVCheck’s work entitlement check and how our service can streamline your recruitment and compliance processes, get in touch with us today.

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