Temporary Work (Skilled) Visa (Subclass 457)
The ever popular Temporary Work (Skilled) visa (subclass 457) involves making a trio of applications. The first is the Standard Business Sponsorship (SBS) application.
- Standard Business Sponsorship application (Business)
- Nomination application (Position)
- Visa application (Applicant)
Read: Temporary Work (Skilled) visa (Subclass 457)
A successful SBS application approves a business to nominate and sponsor a visaapplicant. It is an assessment of the company is capability of supporting their new team member and if their motives for doing so runs parallel with the intended functions of the 457 visa programme – to support the demands on local labour market, not destablise it.
- Must be lawfully operating a business in Australia
- Must meet training requirements
- Must demonstrate commitment to employment of local labour
- Must declare that no discriminatory recruitment will take place
If you’re joining a company that has sponsored others before you, there is a chance you won’t need to worry about this. Wouldn’t that be a relief? Depending on circumstances, a standard business sponsorship can be approved for up to 6 years. An approved business sponsor will not need to make any further SBS applications unless it has expired.
Under what circumstances? A start up business that has only been actively in operation for under 12 months, will be granted an SBS that will expire within 18 months. For other standard business, it may be granted for up to 5 years. Accredited sponsors get up to 6 years.
Not new to the SBS?
If the business has been approved as a sponsor before and is reapplying as the SBS has expired, the business must have fulfilled all obligations and met training requirement benchmarks for their last stretch as an approved sponsor.
If the business is an approved sponsor and wishes to delay the expiry, the business may apply for an extension. This is formally termed as an ‘application to vary’.
What if the business is full of businesses? Do you need to apply for SBS separately for each? The SBS is attached to the Australian Business Number (ABN). It doesn’t matter if your businesses carry different operating names. All business under the ABN for which the SBS was applied for are approved sponsors.
Lawfully Operating
This looks self explanatory but to erase any possible alternate perspectives on what lawful and operating means..
Legally established
The company will need to submit documents such as registration for an Australian Business Number (ABN), Australian Company Number (ACN) or Australian Registered Body Number (ARBN) with ASIC and registration of business/trading name.
The type of documents that will need to be provided will vary depending on if the business entity is a sole trader, partnership, company, incorporated association or unincorporated association
Actively operating
Operation refers to business activity. As has been established, start up businesses are eligible to apply to become sponsors; the length for which a business has been established is not key here. A company that has been in existence for a while but conducts no actual business activity (such as shelf companies) are not considered to be actively operating. Why is this important? Well, a paper company really has no need for an employee.
Evidence that can support that a company is operating include balance sheets, profit and loss statements, tax documents, business plans, contracts, lease agreements, employment documents, reports and the like.
Training requirements
Businesses that have been operating for less than 12 months will need to present a plan to meet training benchmarks. Businesses older than a year must meet these benchmarks for the SBS. Training requirements must also continue to be met for the period the SBS is active.
We talked about the SBS being tied to the ABN (legal entity) earlier. If an owner were to take over a business that has been actively operating for 3 years and you choose to retain it’s ABN, the business will be taken to have been operating for 3 years and not when it changed ownership. The business will not be able to get away with simply submitting a training benchmark plan in this instance.
Training benchmark A: recent expenditure to the equivalent of at least 2% of the payroll of the business, in payments allocated to an industry training fund that operates in the same industry as the business
Training benchmark B: recent expenditure to the equivalent of at least 1% of the payroll of the business, in the provision of training to employees of the business who are Australian citizens or Australian permanent residents.
Meeting the training benchmark
These training expenditure percentages are based on payroll, but payroll is not a static thing. It is important to know how to calculate your goal expenditures and it is determined by the period.
For wholly new SBS applicants, ‘recent expenditure’ refers to the 12 months preceding the SBS application.
Payroll includes remuneration, commissions, bonuses, allowances, superannuation contributions, anything at all that is paid to employees. Contactors service fees (not product costs) must also be included if the work provided is directly related to the business. You must include the service fees of your web developer, if you are a digital agency, but you would not need to include the fees for office cleaning services.
What if the business is already an approved sponsor? The business would have held obligations to meet these benchmarks through the period it has an approved SBS.
Read about fulfilling these training requirements in the context of ‘for the period the SBS is active’
Receipts and documents surrounding the expenditure towards an industry training fund (A) or on training (B) will count as evidence. With training benchmark B, the documents must be able to identity the person for which the training was for as it is required that the expenditure is on Australian citizens and permanent residents.
Auditable plan
The plan that you submit must forecast payroll for the following 12 months and clearly indicate what action to achieve the training benchmarks will be undertaken in these 12 months. This includes what type of training, the duration of training and the costs associated with the training. It would be helpful to provide materials that cover the content and delivery of any training, contracts with external providers and so forth.
Local labour and discriminatory practices
This part is easy, the business only needs to sign a declaration. Please do not taken this lightly however. Regulations have been put in place to prevent the local labour market from losing balance, to prevent undercutting locals and to protect internationals from being exploited. Whether you are an employer or 457 hopeful, do not engage in fraudulent activity! Have respect for the system.
No adverse information
There must be no adverse information about the business or person associated with the business. This includes insolvency or involvement in discriminatory practices and offences related to immigration, industrial relations, occupational health and safety, people smuggled, slavery, sexual servitude, deceptive recruiting, taxation, terrorism and people trafficking.
‘Associated with’ can include partnerships, unincorporated association, corporate, any associated entity; so long as any associated business or associated person in a managerial level position.
Overseas business
Business that are not currently operating in Australia are not ineligible to apply for sponsorship. If they wish to, it must be for the purpose of establishing business in Australia with overseas connections, such as a branch or subsidiary, joint ventures or agency distributorships; relevant documentation will include expansion plans, joint venture agreements and contracts.
There is no way to argue that the 457 visa has become one of the most complicated visas around. Due to the unfortunate amount of corruption surround this visa as well as the nature of businesses and employment, we can only offer rather generic advice. The 457 has gone through a few ‘corrections’ recently, all of which are increasingly restrictive. There are plans that are being firmed up to slash a rather hefty number of occupations of the list for 457 hopefuls as well. Having an experienced agent agent to light the path for you will certainly make a difference if you are applying for this visa.
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