New rules, new fines: How the 457 work visa changed

On 18 April, the Turnbull Government shocked the Australian immigration advice industry by announcing the Subclass 457 visa for foreign workers would be phased out by March 2018.

Since then a new Temporary Skill Shortage (TSS) visa replaced the 457 visa, and new rules and regulations were rolled out.

Taskforce Cadena – a joint initiative between the government and the Fair Work Ombudsman (FWO) – is strongly enforcing the new requirements, and issuing severe penalties for non-compliance.

Here’s how the rules and fines have changed and what you need to know to avoid these hefty penalties.

What has changed?

According to Mark Webster, Founder and Managing Director of Acacia Immigration Australia, the TSS visa is roughly equivalent to the previous 457, but harder to get.

‘You can qualify for an Australian working visa on the basis of your degree or overseas qualifications”, says Webster “but you’re going to need at least two years of work experience before you can be sponsored for a TSS visa.”

“You’ll also need to do a police check for each country you’ve lived in for 12 months or more in the past 10 years”, and the English language requirements for some visas and occupations have also been increased.

The purpose of the change is to protect the rights of Australian workers. A joint press release issued by the Prime Minister and the DIBP (now Department of Home Affairs) said the new temporary visa is to ensure Australian workers are given the absolute first priority for jobs, while businesses are able to temporarily access the critical skills they need to grow if skilled Australians workers are not available.

That means sponsoring businesses have to prove they couldn’t find a suitable Australian worker to fill the position.

“Under the new requirements, every single application will require the employer to show they have advertised the position and they haven’t been able to fill it locally,” says Webster.

“They’ll also have to explain why the people who have applied are no good, as well as their reasons for hiring those people from overseas.”

The cost of non-compliance

In July 2013, the Department of Immigration and Citizenship (later DIBP, now the Department of Home Affairs) introduced some major changes to the 457 visa program, including enforceable obligations for visa sponsors.

Since its establishment in 2015, Taskforce Cadena has been the watchdog overseeing the sponsorship compliance framework, but they’re not the only ones keeping an eye on sponsoring businesses.

“Sponsors are monitored not only by officers of the Department, but also via the Fair Work Ombudsman, the Department of Employment, and the Australian Taxation Office,” says Stephanie Li, Director and Principal Registered Migration Agent at Forward Migration.

Under the sponsorship framework, there are a number of possible enforcement actions if sponsors fail to satisfy their obligations. These include:

  • Issuing a warning.
  • Issuing an infringement notice.
  • Cancelling existing sponsorship rights.
  • Barring a sponsor from the program for up to five years.
  • Executing an enforceable undertaking to ensure that the cause of failure has been rectified.
  • Applying to the Federal Court for a civil penalty order.

Note that one or more of these actions can be taken, and that fines have recently increased. Sponsors can now be issued infringement notices of up to $16,200 for a body corporate (e.g. a company) or $3240 for an individual (e.g. a sole trader) for each failure.

The Department can also apply in court for a civil penalty of up to $81,000 for a body corporate or $16,200 for an individual for each failure.

Approximately 42% of the sponsors monitored in 2015-16 were found to be in breach of their obligations. Of these, 372 had their sponsorship rights cancelled and/or were barred from the program; 210 received a warning; and 28 received infringement notices, with fines totalling just under $272,580. The Federal Court of Australia heard one civil penalty case.

Protecting your business

In light of the recent changes, it is advised to gather necessary information about employees to make sure there aren’t any skeletons in the closet. “A lot of times when employers do that, they find a problem,” says Webster.

“Nine times out of 10 there’s somebody working for them that has some sort of restriction they didn’t know about. So, they might be on a student visa when they thought they were on a partner visa, and instead of working full time they can only work 40 hours a fortnight.”

Webster cites one example of an employer at an aged care facility who discovered a foreign worker who’d been with the company for two years had a regional restriction on his temporary skills visa. By working in Melbourne, the employee was in breach of these conditions, and the employer had no choice but to terminate the contract. It may have been an accidental oversight, but it could have had serious financial repercussions.

“The penalty would have been $16,200 for a basic infringement notice,” says Webster. “And it’s strict liability, so it’s not a defence to say you didn’t know. Even if an employee has lied about having a visa, that’s not an excuse for the employer. They only defence is to check people.”

Recruiters can take proactive steps to ensure their businesses are acting lawfully. Webster says, “It’s a good idea to look at your employment contracts to see whether there’s a term in there that allows you to do visa checking at reasonable times. And secondly, that there is a term that says [employees] maintain a visa with work rights, otherwise there could be grounds for termination.”

The rules apply to all workers, whether they are hired directly or through an agency. “Look at your labour supply contracts,” says Webster, “because under the new legislation you are liable for contractors or temps, even if you’re not directly employing them. So, if you are taking temps from an agency, look at putting in a term that says the temp agency warrants that the staff being provided to the employer are checked and able to work lawfully in Australia.

For peace of mind you can easily check your staff’s eligibility to work in Australia with CVCheck’s work entitlement check.

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