Employer Sponsorship Obligations — What You Must Know

A comprehensive guide to the legal obligations that come with being an approved sponsor in Australia.

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

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

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:

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:

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

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:

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

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:

Best Practices for Compliance

To ensure ongoing compliance with sponsorship obligations, we recommend employers implement the following practices:

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.

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