Passing visa sponsorship costs to sponsored workers
This article provides a clear and practical guide to the requirements surrounding sponsorship costs under Australian migration law. It explains the legal framework, outlines employer obligations, and clarifies what practices are permitted and prohibited when it comes to passing costs to sponsored visa holders. It also highlights the potential civil, administrative, and criminal penalties for non-compliance.
Legal framework
The legal framework governing sponsorship costs and employer obligations is set out under Australian migration law and associated regulations. These requirements include:
• Migration Act 1958 (Cth) – Section 245AR prohibits asking for or receiving a benefit in return for a sponsorship-related event. Criminal and civil penalties apply.
• Migration Regulations 1994 (Cth) – Regulation 2.87A outlines the obligation not to recover or transfer sponsorship costs to visa holders.
• Fair Work Act 2009 (Cth) – Section 324 restricts unlawful deductions from wages, including deductions that benefit the employer or are not authorised in writing for the employee’s benefit.
Prohibited cost recovery practices
Approved sponsors must not recover, transfer, or attempt to recover any of the following costs from a sponsored visa holder:
Payment of the Skilling Australians Fund Levy (SAF) must be paid solely by the employer.
Any professional service fees incurred for preparing or lodging the sponsorship or nomination application cannot be charged back to the visa holder.
If any expenses were incurred by the employer related to advertising, candidate sourcing, or recruitment processes must remain the responsibility of the employer.
Any costs incurred to meet sponsorship obligations, including record-keeping or responding to audits, must not be recovered from visa holders.
These prohibitions apply regardless of whether the visa applicant consents. Any attempt to recover these costs whether through direct payment, reimbursement, wage deductions, or contractual agreements is unlawful.
Permitted costs for visa applicants
Visa applicants may legally pay:
• Visa application charges
• Costs for medical examinations, police checks, and English language tests
• Legal/migration agent fees related solely to the visa application (not the sponsorship or nomination)
Penalties for breaches
Breaching sponsorship obligations can result in significant consequences for organisations in Australia.
Civil penalties for breaches of sponsorship obligations can be significant. Individuals may face fines of up to AUD 79,200, while corporations can incur penalties of up to AUD 396,000. These penalties underscore the importance of strict compliance with all legal requirements to avoid substantial financial consequences.
Administrative actions may also be imposed for non-compliance with sponsorship obligations. These can include the issuance of infringement notices, cancellation of sponsorship approval, and a bar on the sponsor from engaging in future sponsorship activities. In addition, the sponsor’s details may be published on the Register of Sanctioned Sponsors, which is publicly accessible and can impact the organisation’s reputation.
For serious breaches, criminal penalties may apply. These include imprisonment for up to two years and fines of up to 360 penalty units, which currently equates to AUD 118,800.
Monitoring and enforcement
The Department of Home Affairs, Australian Border Force, and other agencies actively monitor compliance with sponsorship obligations through various measures.
These include requests for records and information, site visits that may occur with or without notice, and data sharing with the Fair Work Ombudsman and the Australian Taxation Office.
Sponsors can be subject to monitoring for up to five years after their sponsorship approval ends, making ongoing compliance and record-keeping essential.
Common misconceptions
“Clawback” agreements that require visa holders to repay sponsorship costs are unlawful under Australian migration law. Even if a visa holder consents, this does not make cost recovery legal.
All business-paid costs must remain the employer’s responsibility and cannot be deducted from wages or reimbursed by the visa holder. Additionally, using third-party arrangements such as recruitment agencies does not remove the sponsor’s liability for compliance.
Best practice recommendations
Employers should ensure all sponsorship-related costs are paid directly from business funds and avoid any contractual or informal arrangements that transfer these costs to visa holders. It is essential to maintain detailed records of all payments, conduct regular compliance audits, and provide staff training.
Before introducing any cost-sharing policies, employers should seek professional legal advice to confirm compliance with Australian migration and employment law.
Further information
For tailored advice or assistance with corporate immigration matters, including sponsorship compliance, audits, training and risk management, please contact our team of experienced corporate immigration lawyers at Ethos Migration Lawyers.