In shortAn approved sponsor must pay the sponsored worker at least the nominated salary on terms no less favourable than an Australian doing the same work, must not recover migration costs from the worker, must keep records, must notify the Department of events such as the worker’s employment ending within 28 days, and must cooperate with Department inspections. Breaches can lead to sanctions, including a bar on sponsoring (typically 2 to 5 years) and civil penalties.
Overview of Sponsorship Obligations
When an Australian employer becomes an approved sponsor under the migration program, they take on a set of legally binding obligations. These obligations are designed to protect sponsored workers and ensure the integrity of the employer sponsorship system. They apply from the moment the sponsorship is approved and continue for a specified period even after the sponsorship relationship ends.
Sponsorship obligations are set out in the Migration Act 1958 and the Migration Regulations 1994. They are enforceable by the Department of Home Affairs, and breaches can result in significant penalties including fines, bars from future sponsorship, and in serious cases, criminal prosecution.
Understanding and complying with these obligations is not optional. Every approved sponsor must have systems in place to ensure ongoing compliance throughout the sponsorship period.
Obligations Continue After Employment Ends
Many sponsorship obligations continue for a period after the sponsored worker's employment ends or after the sponsorship is cancelled. Employers must maintain records and meet notification requirements even after the worker has left their employment.
Terms and Conditions of Employment
One of the most fundamental obligations is that the sponsor must ensure the sponsored worker is employed under terms and conditions that are no less favourable than those provided to an equivalent Australian worker performing the same work in the same location.
What This Means in Practice
- Salary: The sponsored worker must be paid at least the salary specified in the nomination approval, which must meet or exceed both the applicable income threshold (CSIT for the 482 Core Skills stream) and the Annual Market Salary Rate. Salary must be paid in full and on time.
- Hours: Working hours must be consistent with those of equivalent Australian workers. The position must be full-time (at least 35 hours per week for most occupations).
- Leave entitlements: The worker must receive the same leave entitlements as Australian workers, including annual leave, personal/carers leave, and any other entitlements under the applicable award or enterprise agreement.
- Superannuation: The employer must pay the minimum superannuation guarantee for the sponsored worker, just as they would for any Australian employee.
- Working conditions: All workplace health and safety obligations apply equally to sponsored workers.
No Salary Deductions for Migration Costs
Employers must not recover migration costs from the sponsored worker's salary. It is illegal to deduct or recover visa application fees, migration agent fees, or other sponsorship costs from the worker's pay. The employer bears these costs.
Record Keeping Obligations
Sponsors must keep records relating to their sponsorship and the employment of sponsored workers. These records must be kept for a specified period and made available to the Department of Home Affairs upon request.
Records That Must Be Maintained
- Employment records: Payslips, timesheets, employment contracts, and records of all payments made to the sponsored worker
- Tax records: PAYG payment summaries, tax file number declarations, and superannuation contribution records
- Sponsorship records: Copies of all sponsorship and nomination applications, supporting documents, and correspondence with the Department
- Labour market testing records: Copies of job advertisements, records of applications received, and evidence of the recruitment process
- Training records: Evidence of training expenditure or contributions to industry training funds
- Notification records: Copies of all notifications sent to the Department regarding changes to the sponsorship or the worker's circumstances
Record Retention Period
Records must be kept for a minimum of two years after the sponsorship obligation period ends. For most sponsorship arrangements, the obligation period is two years after the sponsorship ceases. This means records may need to be retained for up to four years or more after the worker's employment ends.
Notification Obligations
Sponsors must notify the Department of Home Affairs of certain events within specified timeframes. Failure to provide timely notifications is one of the most common sponsorship breaches and can result in sanctions.
Events That Must Be Notified
| Event | Timeframe |
|---|---|
| The sponsored worker ceases employment | Within 28 days |
| Change in the business name, address, or structure | Within 28 days |
| Change in the worker's duties or position | Within 28 days |
| The business is sold, transferred, or ceases trading | Within 28 days |
| The business becomes insolvent or is placed in administration | Within 28 days |
| A change in the worker's work location | Within 28 days |
| Any adverse information about the business or the sponsorship | Within 28 days |
How to Notify the Department
Notifications can be submitted through the sponsor's ImmiAccount portal using the relevant notification form. It is important to keep a record of all notifications submitted, including the date of submission and the details provided.
Non-Discrimination
Sponsors must not engage in discrimination against sponsored workers. This means:
- Sponsored workers must not be treated less favourably than Australian workers performing equivalent work
- Sponsors must not use the worker's visa status to exploit or disadvantage them
- Sponsored workers must have the same access to workplace facilities, training opportunities, and career advancement as Australian workers
- Threats related to visa cancellation or immigration status must not be used as a form of workplace control
The non-discrimination obligation reinforces that sponsored workers are entitled to the same workplace rights and protections as all other employees in Australia.
Training Obligations
Sponsors must demonstrate a commitment to training Australian citizens and permanent residents. This is assessed at the nomination stage through the Skilling Australians Fund (SAF) levy, which replaced the previous training benchmarks.
When nominating a worker for a 482, 494, or 186 visa, the employer must pay the SAF levy. This levy is calculated based on the size of the business and the duration of the nomination:
- Small business (annual turnover less than $10 million): $3,000 per year for temporary visas, $5,000 per nomination for permanent visas
- Large business (annual turnover $10 million or more): $5,000 per year for temporary visas, $8,000 per nomination for permanent visas
Travel Costs Obligations
One of the most significant and often overlooked obligations is the requirement for sponsors to pay reasonable travel costs for the sponsored worker (and their family members) to leave Australia if the worker's employment ends and they have no other lawful basis to remain.
What This Covers
- The cost of a one-way airfare to the worker's home country (economy class)
- Reasonable travel costs for the worker's spouse or de facto partner and dependent children who are in Australia on visas linked to the sponsorship
- The obligation applies even if the worker was terminated for cause or resigned voluntarily
Travel Cost Obligation Cannot Be Contracted Out
The employer cannot transfer the travel cost obligation to the worker through the employment contract. Even if the employment contract states the worker is responsible for their own travel, the sponsor remains legally obligated to pay these costs under the Migration Regulations.
Cooperation with Inspectors
Sponsors must cooperate with any monitoring, investigation, or compliance activity conducted by the Department of Home Affairs. This includes:
- Allowing inspectors access to the workplace to verify that the sponsored worker is employed in the nominated position
- Providing records and documents upon request
- Attending interviews or providing written responses to queries from the Department
- Not obstructing or hindering an inspector in the performance of their duties
The Department conducts both random and targeted monitoring visits to ensure sponsors are meeting their obligations. Inspectors may visit the workplace without prior notice.
Penalties for Non-Compliance
Breaching sponsorship obligations can result in serious consequences. The Department of Home Affairs has a range of enforcement tools available:
Administrative Sanctions
- Infringement notices: On-the-spot fines for specific breaches, typically ranging from $2,000 to $15,000 per breach
- Sponsorship cancellation: The Department may cancel the employer's sponsorship approval, preventing them from sponsoring any further overseas workers
- Barring: The employer may be barred from being approved as a sponsor for a specified period (typically 2 to 5 years)
Civil Penalties
For more serious breaches, the Department can seek civil penalties through the Federal Court. Civil penalties for sponsorship obligation breaches can be substantial:
| Penalty Type | Individual | Body Corporate |
|---|---|---|
| Standard breach | Up to $33,000 per breach | Up to $165,000 per breach |
| Aggravated breach | Up to $66,000 per breach | Up to $330,000 per breach |
Criminal Penalties
In the most serious cases, such as knowingly or recklessly exploiting sponsored workers, criminal prosecution may be pursued. Criminal penalties can include imprisonment.
Non-Compliance Is Taken Seriously
The Department actively monitors sponsors and investigates complaints. In recent years, there has been a significant increase in enforcement activity, with more infringement notices issued, more sponsorships cancelled, and larger civil penalties sought through the courts. Prevention through proper compliance systems is far better than dealing with the consequences of non-compliance.
Department Monitoring Activities
The Department of Home Affairs conducts various monitoring activities to ensure sponsors comply with their obligations:
- Site visits: Inspectors may visit the workplace to verify the worker is employed in the nominated position, check working conditions, and review records
- Data matching: The Department cross-references sponsorship data with information from the ATO, Fair Work Ombudsman, and other government agencies to identify potential non-compliance
- Complaint-based investigations: Investigations triggered by complaints from sponsored workers, former employees, competitors, or members of the public
- Random audits: Selected sponsors may be subject to random compliance audits
- Targeted campaigns: The Department periodically runs targeted compliance campaigns focused on specific industries, regions, or types of breaches
Best Practices for Compliance
To ensure ongoing compliance with sponsorship obligations, we recommend employers implement the following practices:
- Designate a compliance officer: Appoint a person within your organisation who is responsible for managing sponsorship obligations and ensuring compliance
- Maintain a compliance calendar: Set reminders for notification deadlines, record retention periods, and other time-sensitive obligations
- Keep records organised: Maintain a dedicated file for each sponsored worker with all relevant employment and sponsorship records
- Conduct internal audits: Periodically review your compliance with sponsorship obligations and address any gaps
- Train HR staff: Ensure that HR and payroll staff understand the specific obligations that apply to sponsored workers
- Notify promptly: Submit notifications to the Department as soon as a notifiable event occurs, rather than waiting until the deadline
- Seek professional advice: Consult with a registered migration agent if you are unsure about any aspect of your obligations
Frequently Asked Questions
How long do sponsorship obligations last?
Sponsorship obligations generally continue for the duration of the worker's visa and for a period of two years after the sponsorship ceases. Some obligations, such as record keeping, extend even further.
What if my sponsored worker resigns?
You must notify the Department within 28 days of the worker ceasing employment. Your travel cost obligation still applies. You should also review whether any other obligations continue to apply after their departure.
Can I recover sponsorship costs from the worker?
No. Sponsors are prohibited from recovering migration-related costs from sponsored workers. This includes visa application fees, migration agent fees, SAF levy, and any other costs associated with the sponsorship process.
What if my business changes ownership?
If the business is sold or transferred, you must notify the Department within 28 days. The new owner may need to apply for their own sponsorship approval and may need to enter into new sponsorship arrangements for any existing sponsored workers.
Do obligations apply if the visa application is refused?
Some obligations begin from the date of sponsorship approval, not from when the worker starts employment. However, obligations related to employment terms and conditions only apply while the worker is actually employed.
Need Help Understanding Your Obligations?
Sponsorship obligations are complex and the penalties for non-compliance are serious. Book a consultation with our registered migration agent to ensure your business is fully compliant.
Consultations are paid: A$330 for 30 minutes with Keshab Chapagain, registered migration agent (MARN 1576536), booked through WIDEN.