Paying for Sponsorship

Paying for Sponsorship

Where is the line really drawn?

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Regulations (introduced on 14 December 2015) state that there should be no ‘asking for or receiving a benefit in return for the occurrence of a sponsorship related event’ and rightly so, a genuine hire should not involve such transactions, and leaves the visa holder open to exploitation. This regulation is imposed regardless of when or whether a visa was granted and if the sponsorship event occurred or not.

Should it be, that a sponsor always absorbs all costs related to the visa application? This can make the hire quite a bit more costly than it needs to be and may put strain on the sponsor and sponsor-employee relationship. In a roundabout way, it may also create unfair treatment even when the hire is genuine. So where are the lines drawn exactly?

A benefit is defined to include:

  • One off lump sum payment
  • Ongoing regular payments
  • Underpayment of a visa holder’s wages or salary
  • Repayment of a visa holder’s wage or salary
  • Unpaid work
  • Hours of work paid below the visa holder’s hourly wage or enterprise agreement arrangements
  • Payment for goods or services above market value
  • Gifts

The above list is not exhaustive. The only costs exempt in the regulations surrounding payment are Department of Immigration and Border Protection (DIBP) charges. These are sponsorship, nomination and visa application fees.

However, be careful here as 457 sponsors are subject to the sponsorship obligation that they are ‘not to recover, transfer or take actions that would results in another person paying for certain costs’. This includes:

  • cost of sponsorship and nomination charges
  • migration agent costs, associated with the lodgement of sponsorship and nomination applications
  • administrative costs and any sundry costs an employer incurs when they conduct recruitment exercises, including:
  • recruitment agent fees
  • migration agent fees or legal fees associated with sponsorship monitoring
  • the cost of job advertising
  • screening of candidates, short listing, interviews and reference checks
  • salaries of recruitment or human resource staff
  • the cost of outsourcing background checks, police checks and psychological testing, if these relate to an employer determining an applicant’s suitability for the position
  • training of new staff
  • pre agreed costs that are related to attracting a UC-457 sponsored person such as paying for airfares to Australia, visa application costs and moving assistance
  • responding to queries for prospective candidates, and advising unsuccessful applicants
  • monies associated with the sponsor meeting training requirements – refer to Obligation to provide training
  • travel costs for the sponsor to interview and/or meet the applicant either overseas or in Australia

Learn:Sponsorship Obligations

Therefore it goes that in the case of an Employer Nominated Scheme (ENS) 186 Visa and Regional Sponsored Migration Scheme (RSMS) 187 visa, it is possible for it to be agreed that the applicant will foot the migration agent and DIBP application fees.

If the sponsor has agreed to pay these charges as a means of attracting the candidate for the job, then it will be viewed as a recruitment activity cost and cannot be recovered.

Definitely in breach of regulations involve:

  • An applicant bribing a potential sponsor with a yacht as a gift in return for sponsorship
  • The sponsor threatening to cancel the visa holder’s visa should they not work for a lower pay
  • The sponsor requiring the visa holder to work longer hours than agreed for no proportionate rise in wages
  • The sponsor asks for a 457 visa applicant to pay all migration agent and DIBP charges

Let’s go through some examples of what is not considered a breach of this regulation.

  • Visa holder gives employer a box of chocolates as a thank you
  • Visa holder offers to take less desirable shifts (getting the appropriate wage and hours)
  • The employer offered to loan the visa holder some money to settle in Australia and the visa holder is repaying the loan
  • A migration agent charging a higher than average fee for a complicated visa application case
  • The sponsor asks for a 457 visa applicant to pay for migration agent and DIBP charges related to the visa application stage of the application
  • The sponsor asks for a RSMS 187 applicant to pay for all migration agent and DIBP charges related to the nomination and visa application

All monetary and benefit related agreements should be put in black and white to insulate against and as evidence should either party attempt to default on their agreements or if authorities find cause for suspicion.

Don’t forget that the ‘no payment for sponsorship’ regulation includes all parties involved and is not limited to sponsors. Migration agents and applicants and other intermediaries are similarly condemned in receiving or offering benefits for sponsorship related events.

 

Consequences? 

In the application for an employer sponsored visa, the sponsor, applicant and applicant’s dependents cannot have had any payment for visa sponsorship activity in the previous three years or risk the application being refused. More severe penalties exist, depending on the circumstances, severity and frequency of the offence. These can include civil and criminal penalties; the maximum civil penalty for individuals is 240 penalty points which is $43,200 and the maximum criminal penalty or individuals is 2 years behind bars or 360 penalty points, which is $64,800. Bodies corporate suffer five times the punishment, with up to $216,000 maximum civil penalty and up to $324,000 with each criminal conviction. Guilty visa holders may have their visas cancelled and sponsors may be barred from future sponsorship and/or have their sponsorship cancelled. Visa holders under cancelled sponsorship may also lose their visas, even those that were granted before 14 December 2015 should the conduct have occurred after the introduction of the regulation. Ongoing applications are likely to find the applications delayed and/or refused.

This is not a regulation to be taken lightly (none are, but especially not this one). Abuse of the employer sponsored programme harms Australian workers as well as encourages exploitation of foreign labour. Many unfortunately souls have been tricked into slave like conditions, or have turned over tens of thousands in the false promise of a visa.

 

Related articles:

Learn more Temporary Work (Skilled) 457 Visas

Learn more Employer Nominated Scheme (ENS) 186 Visas

Learn more Regional Sponsored Migration Scheme (RSMS) Visas


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