Who is responsible for paying for the costs associated with employer sponsored visa applications?

Businesses may be able to sponsor foreign workers to Australia through the employer sponsored visa program (which includes the Temporary Skill Shortage (Subclass 482) (TSS) visa and the Employer Nomination Scheme (Subclass 186) (ENS) visa). This article explains whether fees in relation to these applications can be passed onto applicants, including examples provided by the Department of Home Affairs (Department).

What is the basis for regulating these payments?

Both the Migration Act 1958 (Cth) (the Act) and the Migration Regulations 1994 (Cth) (the Regulations) seek to regulate the payment of costs associated with an employer sponsored visa application. The overarching values of the sponsorship compliance and legislative frameworks were introduced for a number of reasons, including ensuring that sponsored persons are not exploited or extorted. It also seeks to ensure that the visa program is utilised for its intended purposes, and not for sponsors to obtain a financial gain nor for applicants to attain a migration outcome through illicit means.

It is important to draw a distinction between the requirements for the TSS visa and the ENS visa as different obligations apply.

Can the visa applicant pay for fees?

The below table summarises the fees in relation to a TSS and ENS application and considers whether a visa applicant may take on the cost:

Fees	TSS/482	ENS/186
Nomination fee	✖	✔
Cost associated with the nomination application (including professional fees, advertising and recruiting cost)	✖	✔
Skilling Australians Fund (SAF) Levy	✖	✖
Visa application	✔	✔
Cost associated with the visa application (including professional fees, English test, police clearances and health examination)	✔	✔

Note that this table is for general guidance, as nuances in the Regulations and Act (particularly in relation to TSS visas) can prohibit costs even when they are in relation to a visa application.

TSS nomination and visa fees

The sponsorship obligations framework applies to approved work sponsors, which includes a standard business sponsor in relation to TSS visa applications. Specifically, 2.87 of the Regulations establishes an obligation that the approved work sponsor must pay and assume all the following costs:

1. cost of becoming a sponsor (including the setting up of the “Standard Business Sponsor”)
2. nomination charges, including the training contribution charge (SAF Levy)
3. legal representation/migration agent costs associated with sponsorship and nomination applications and
4. costs that relate specifically to the recruitment of a primary sponsored person.

The approved work sponsor cannot attempt to transfer, recover, or take actions that would result in the visa applicant paying for the above costs, including a salary deduction to recover fees. Even if the visa applicant consents to this, the approved work sponsor will fail to satisfy their sponsorship obligations.

Approved work sponsors are also unable to receive a benefit for a sponsorship event (see below under ENS).

Does the above apply to visa applications?

Notably, the obligations do not refer to costs associated with visa applications, but instead to sponsorship and nomination charges. This means the obligations do not ordinarily apply to costs in relation to the visa application.

What are the costs in relation to the recruitment process?

Despite the lack of an explicit limitation, in certain cases, visa application costs can be captured under the limitation regarding recruitment costs. Though “recruitment costs” are not defined in legislation, Department policy notes that such costs could include:

• legal representation/migration agent fees
• administrative costs and any sundry costs incurred associated with the recruitment process, including:
  • recruitment agent fees
  • job advertising fees
  • screening, short listing, interviewing and conducting reference checks of candidates
  • salaries of recruitment or human resource staff
  • outsourcing background checks, police checks and psychological testing if these relate to an employer determining an applicant’s suitability for the position
  • responding to queries from potential candidates and advising unsuccessful applicants
• training of new staff
• pre-agreed costs related to attracting a potential primary sponsored person, such as paying for airfares to Australia, visa application costs and moving assistance;
• travelling nationally or internationally to interview and/or meet applicants

The question is, therefore, which visa costs are a part of the recruitment costs. For example, if an approved work sponsor agreed to pay the visa application costs and associated migration agent fees in order to attract a potential sponsored person, then such costs would be considered recruitment costs and if the sponsor seeks to recover these costs, they could fail to satisfy their sponsorship obligation. Approved work sponsors intending to pass on visa application costs to an applicant must therefore be clear about this in the initial recruitment process.

What about the SAF levy?

The SAF Levy is expressly excluded as a cost associated with the nomination application. As such, this cost must be paid for by the business.

When does the obligation apply?

The obligation to not recover, transfer or take actions that would result in another person paying for certain costs commences on the day the business is approved as a work sponsor, or the day the work agreement commences – whichever is earlier.

The obligation ends on the day where the person ceases to be an approved work sponsor or party to a work agreement, or there are no sponsored persons in relation to the sponsor – whichever is later.

ENS nomination and visa fees

The sponsorship obligations regarding nomination costs only applies to TSS applications. ENS visa application fees are also not directly captured by the sponsorship obligations in 2.87 of the Regulations. However, an ENS application is impacted by section 245AR of the Act. Broadly speaking, section 245AR notes that persons who ask for or receive a benefit in return for a “sponsorship-related event” can be subject to criminal prosecution, civil penalties and/or various administrative penalties.

What is a “sponsorship-related event”?

A sponsorship-related event is defined in section 245AQ of the Act, and very broadly covers “a person applying for approval as a work sponsor” and “a person applying under the regulations for approval of the nomination of a position in relation to the holder of, or an applicant or proposed applicant for, a sponsored visa, or including another person in such a nomination” (among others). That is, it appears to capture any employer sponsored nomination applications.

What is a benefit?

The word “benefit” is used to describe the wide range of payments and other arrangements that may be asked for, offered, received, or provided. It is intentionally broad in its definition and can encompass a range of things, including:

• a one-off lump sum payment
• ongoing regular payments
• underpayment of a visa holder’s wages or salary (including secondary visa holders also working for the sponsor)
• repayment of a visa holder’s wage or salary
• unpaid work
• payment for goods or services above market value
• selling goods below market value
• requirement to spend
• visa holders paying their own tax and/or superannuation
• secondary visa holders undertaking unpaid work
• paying a legal professional/ migration agent well in excess of reasonable rates for professional services
• gifts

The following examples have been provided in policy as scenarios that will contravene the Migration Act.

1. A sponsor advises a job applicant that they will nominate them for a TSS/482 visa only if the job applicant pays the sponsor a lump sum upfront.
2. A sponsor advises their sponsored visa holder that they will terminate their employment unless they return part of their salary every month.
3. An employer agrees to nominate a prospective employee for an ENS/186 visa only if they agree to work for wages less than the award rate and undertake unpaid overtime.
4. A sponsor agrees to continue sponsoring a TSS/482 visa holder only if the visa holder’s partner works for them for wages less than the award rate.
5. A labour hire intermediary asks for a large lump sum payment to find an employer willing to nominate a prospective visa holder.
6. A sponsor asks a TSS/482 visa holder to pay their own taxation and superannuation in return for continued sponsorship.
7. An employer receives a lump sum to nominate a prospective employee for an ENS/186 visa.

What is not a benefit?

Under Department policy, the term “benefits” expressly excludes government statutory charges (such as sponsorship, nomination fees or visa application charges) and associated legal representation/ migration agent costs. This means that, unlike the TSS nomination applications, the ENS nomination does not have to be paid by the company.

The following examples have also been provided as scenarios that will not contravene the Act.

1. An ENS/186 employer advises a job applicant that they will nominate them for a Subclass ENS/186 visa only if the person pays all migration agent and statutory government charge (noting that the SAF Levy cannot be passed on)
2. A TSS/482 visa holder generates a profit for the business by increasing sales by 30%. The business retains the profit and continues to employ the TSS/482 visa holder.
3. A migration agent charges a higher than average fee for a TSS/482 nomination and visa application but the case has significant complexities that warrant a higher fee.

What about the SAF levy?

The SAF Levy is expressly listed as a cost that must not be passed onto an employee.

More information?

Hannan Tew has assisted many businesses and job seekers to obtain employer-sponsored visas, and can advise about the fees that the sponsor is obligated to pay and related sanctions. Feel free to contact us by email at [email protected] or phone (03) 9016 0484 for more information.