‘Payment for Visas’ and Avoiding Penalties as a 457 Business Sponsor

In the aftermath of the 7-Eleven scandal last year, we have seen measures introduced by the Australian Government to penalise 457 business sponsors acting fraudulently or obtaining a financial benefit from sponsoring overseas workers. Fairfax Media reported that 457 visa holders were paying 7-Eleven chain stores up to $70,000 to help secure Australian work visas for their staff as a sideline revenue stream.

It has been asserted that certain 7-Eleven franchisees were conducting a 457 ‘visa factory,’ charging workers between $20,000 and $70,000 to sponsor them. In an effort to prevent this situation in the future, the Migration Amendment (Charging for a Migration Outcome) Act was introduced by the Australian Parliament last month.

Why sponsor overseas workers?

Sponsoring 457 visa holders is an important way for Australian businesses to retain and hire skilled overseas workers, especially where there is a gap in the Australian market for particular occupations.

The 457 visa program is crucial for Australian businesses and it is in the Australian national interest that companies are able to employ appropriate staff with the right skills and knowledge to be able to perform duties within the business.

‘Payment for Visas’ conduct

However, businesses now risk penalties under the Migration Amendment (Charging for a Migration Outcome) Act (the Act), for receiving “benefits” for sponsoring 457 visa holders. The Act has made it unlawful for a person to ask for, receive, offer or provide payment or other benefits in return for a range of sponsorship-related events.

“Benefit” is intended to include any payment or deduction, and any kind of real or personal property, advantage, service or gift. (It does not include payment for the provision of a professional service, such as by a migration or recruitment agent.)

‘Payment for visas’ can now be penalised in the following manner:

  1. Criminal: The Act has rendered it a criminal offence for a sponsor or other third party to ask for or receive a benefit in relation to a sponsorship-related event. The offence may be punishable by a maximum of two years’ imprisonment or a fine of up to currently $64,800 for an individual person or $324,000 for a body corporate; and
  2. Civil: The maximum civil penalty equates to $43,200 for an individual person or $216,000 for a body corporate.

Also, for individuals- the Minister for Immigration is now able to cancel a subclass 457 visa where a benefit was asked for or received in exchange for sponsorship.

How can a business sponsor avoid penalties?

In operating as a 457 business sponsor, it is necessary that a business protects itself and ensures that it meets its sponsorship obligations. Our suggestions for a 457 business sponsor to protect itself are as follows:

  • Ensure that when sponsoring a 457 visa holder the business, or individuals within the business, do not receive a payment or gift for sponsoring the overseas worker;
  • Ensure that the 457 visa holder employee is working in the nominated occupation specified to the Department of Immigration and Border Protection (DIBP);
  • Ensure that the 457 visa holder is paid in accordance with information provided to the DIBP; and
  • Keep records of the 457 visa holder’s employment within the company, such as payslips and leave records.

For advice regarding sponsoring workers on a subclass 457 visa and compliance issues, please do not hesitate to contact us at info@hartmanlawyers.com.au for Australian immigration assistance or call our office:

Australia: +61 3 9021 0986
London: +44 20 3670 4586

We look forward to assisting you in 2016.

Disclaimer:

The information on this website is intended only to provide a summary and general overview on relevant matters. It is not intended to be comprehensive nor does it constitute legal advice. You are advised to seek legal or other professional advice before acting or relying on any of the content contained in this website.