Being approved as a Work Sponsor allows an eligible business to sponsor overseas workers as a Standard Business Sponsor (SBS) for the purpose of filling skills shortages in its business. An employer may sponsor workers under the Subclass 482 Temporary Skill Shortage (TSS) visa program (and its predecessor, the Subclass 457 Temporary Skilled (Work) visa, which was replaced by the TSS visa as of 18 March 2018).

What Is The TSS Visa Program?

The employer sponsorship program is designed to assist employers to hire genuinely skilled workers from overseas in an effort to address skills shortages in circumstances where an appropriately skilled Australian is not able to be sourced to perform the work. It is a targeted program, specifically to fill temporary labour market shortages and at the same time, ensure that Australian workers are prioritised.

What Are The TSS Visa Streams?

The program comprises the following visa streams:

  • Short-Term (ST) stream – this stream allows employers to source genuinely skilled temporary overseas workers to fill short-term positions in a range of occupations, for a maximum period of two years (or four years if an international trade obligation applies);
  • Medium-Term (MT) stream – under this stream, employers are able to source highly skilled overseas workers to fill medium-term critical skills for up to four years. Workers may be eligible to apply for permanent residence after three years; and
  • Labour Agreement stream – this stream requires the sponsoring employer to enter into a Labour Agreement with the Department of Home Affairs (the Department), which allows the employer to source skilled overseas workers where there is a demonstrated need that cannot be met in the Australian labour market, and the standard TSS visa program is not available.

How Do You Apply To Sponsor Workers?

The SBS program is a three stage process. It requires approval of the following applications by the Department:

  • Sponsorship – the employer must apply for approval as a SBS. The sponsorship term is 5 years (this means an employer with a current active approved sponsorship may not be required to apply for a sponsorship each time they seek to sponsor a worker for a subclass 482 visa);
  • Nomination – the employer is required to nominate an occupation on the relevant Skilled Occupation List (SOL) to be filled by a foreign worker; and
  • Visa – the nominee (the person who seeks to be sponsored in the nominated occupation) must lodge a separate application for the 457 visa replacement
    on their on behalf.

Note that the above three applications may be made at the same time. However for a successful application, all three stages must be approved by the Department.

For employer sponsorships under the Labour Agreement stream, the sponsorship stage requires the prospective employer sponsor to negotiate and sign a Labour Agreement with the Department (replacing the SBS application referred to above). Nomination and visa applications are required.

What Does The TSS Visa Allow Its Holder To Do In Australia?

Once approved and for the period during which the visa 457 replacement is in effect, its holder is permitted to:

  • work in Australia for their approved sponsor in their approved occupation;
  • bring eligible dependants with them to Australia (dependants are able to work and study in Australia); and
  • have unrestricted travel in and out of Australia.

Sponsorship Obligations Apply

Business sponsors are subject to sponsorship obligations which they must abide by (some of which extend beyond the term of their sponsorship approval) to ensure that overseas skilled workers are protected from exploitation. In addition, the rules are there to make sure that the 457 replacement visa program is being used to meet genuine skills shortages, and not to undermine the wages and conditions of local employees.

These strong worker protections are also aimed at ensuring that overseas skilled workers are provided with the same workplace rights as Australian workers.

Who Can Be An Employer Sponsor?

A sponsor may be:

  • an individual;
  • a body politic;
  • a body corporate;
  • a partnership; or
  • an unincorporated association.

This encapsulates the following types of entities:

  • sole traders;
  • partnerships;
  • proprietary companies;
  • public companies;
  • government departments;
  • statutory authorities;
  • not-for-profit-organisations; and
  • educational institutions.

How Do You Apply To Become An Employer Sponsor?

An eligible employer sponsor must submit an online application for sponsorship approval, and pay the lodgement fee, which is currently set at $420.

Only in very limited circumstances may an application be made via an alternative method (subject to authorisation by the Department).

What Are The Requirements To Be Approved As An Employer Sponsor?

In order for an application for a SBS to be approved, the criteria to be met by the applicant include the following:

  • the sponsorship must be applied for in accordance with the relevant regulations;
  • be lawfully operating a business;
  • if the applicant is lawfully operating a business in Australia, they have attested that they have a strong record of, or a demonstrated commitment to, employing local labour, and has declared that they will not engage in discriminatory recruitment practices; and
  • there is no adverse information known to the Department about the applicant or a person associated with the applicant, or it is reasonable to disregard this information.

Also be aware that there are two types of SBS, being an Australian Business Sponsor (ABS) and an Overseas Business Sponsor (OBS). Businesses are subject to different requirements to be approved as a SBS, depending on whether they are operating a business inside or outside Australia.

Therefore the provisions also outline circumstances for an applicant to be eligible to apply for an OBS where they are lawfully operating a business outside Australia and are not lawfully operating a business in Australia, and they seek to establish, or assist in establishing, a business operation in Australia with overseas connections or to fulfil, or assist in fulfilling, a contractual obligation.

What Does ‘Lawfully Operating A Business’ Mean?

To satisfy the requirement to be legally established, the applicant must meet all registration requirements (as specified under the laws of the country in which the business is incorporated). This will depend on the way the business is structured and conducted.

For a company to be legally established in Australia, the registration requirements may include the following (again, dependent on the business structure and related business arrangements):

  • registration for tax purposes (Australian Business Number (ABN));
  • registration of an Australian Company Number (ACN) or Australian Registered Body Number (ARBN) with the Australian Securities and Investments Commission (ASIC);
  • registration of a business/trading name.

To demonstrate that the business is operating, it should have a system of record keeping in order to verify the business activities, as claimed.

This means that a shelf company (which is legally established but is not operating any business activity) would not satisfy this requirement.

New or start-up businesses (which have operated for less than 12 months) can still meet this criterion if they provide evidence to demonstrate that they are operating (even if only for a short period).

To evidence that the applicant is operating a business for this purpose, the types of documents that may be provided to the Department as part of the sponsorship applications include:

  • balance sheet or statement of position for the most recently concluded financial year (with comparative figures for the previous financial year);
  • profit and loss statement (or statement of performance) for the most recently concluded financial year, with comparative figures for the previous financial year;
  • business tax returns for the most recently concluded financial year;
  • if the financial period to which the financial statements or tax returns submitted relate ended more than 3 months before the application is lodged, a business activity statement (BAS) for each complete quarter between the end of the financial period and the date of application lodgement should be submitted;
  • detailed business plan;
  • contract of sale for the business purchase;
  • lease agreement for business premises;
  • evidence of lease or purchase of relevant items for the business (such as machinery, equipment or furniture);
  • contracts to provide services;
  • evidence of the employment of staff;
  • business bank statement for the period of business operations;
  • annual report; and
  • letter of support from the business’ accountant.

A combination of the above can be provided (the amount of evidence needed will depend on the individual circumstances of the applicant).

Sponsorship Renewal

A business sponsor may apply to renew their SBS online. However, if the employer does not apply for renewal before their current sponsorship approval period ends, they will need to apply to become a sponsor again, using the full sponsorship application form.

Sponsorship Accreditation

An employer can apply to become an Accredited Sponsor as part of their application to become an approved SBS, or to renew their sponsorship.

Being approved as an accredited sponsor entitles the employer to receive priority processing on all of their nomination and visa applications.

How Does A Business Sponsor Nominate A Position?

The second stage of the employer sponsorship program requires the employer to apply for nomination of the position which they are seeking to fill.

Requirements for nomination approval include the following:

  • the nomination is applied for in accordance with the relevant regulations;
  • there is no adverse information known to the Department about the sponsor, or a person associated with the sponsor, or is it reasonable to disregard this information;
  • the applicant is a SBS;
  • the sponsor has nominated an occupation that is included in the relevant Skilled Occupation List (SOL) (this will be based on the visa stream being applied for. Occupations listed on the Short-term Skilled Occupation List (STSOL) must apply for the ST visa stream; occupations on the Medium and Long-term Strategic Skills List (MLTSSL) must apply for the MT visa stream). For the Labour Agreement stream, the nominated occupation must be specified in the Labour Agreement as being eligible for nomination);
  • the position associated with the nominated occupation is genuine;
  • the position associated with the nominated occupation is full-time (unless it is reasonable in limited circumstances to disregard this requirement);
  • the sponsor will engage the nominee as an employee (or as an employee of their associated entity) under a written contract of employment (unless exempt) and a copy of the signed contract is provided (this applies to the ST and MT visa streams);
  • all salary related requirements have been met (see further below);
  • there is no information known to the Department which indicates that employment conditions for the nominee are less favourable than those that apply, or would apply, to an Australian performing equivalent work at the same location, or it is reasonable to disregard this information;
  • there is no information known to the Department indicating that the sponsor has engaged in discriminatory recruitment practices; and
  • Labour Market Testing (LMT) has been undertaken in relation to the nominated occupation (unless this is inconsistent with Australia’s international trade obligations).

As part of the nomination application, the sponsor must also pay a nomination training contribution charge (Skilling Australia Fund (SAF)).

What Are The Salary Related Requirements For A Nomination Application?

The following criterion must be met:

  • the Annual Market Salary Rate (AMSR) for the nominated occupation, excluding any non-monetary benefits, must not be below the Temporary Skilled Migration Income Threshold (TSMIT), unless it is reasonable to disregard this criterion;
  • the nominee’s Guaranteed Annual Earnings (GAE) for the nominated occupation will not be less than the AMSR; and
  • the nominee’s GAE, excluding any non-monetary benefits, is not less than TSMIT, unless it is reasonable to disregard this criterion.

Note these requirements do not apply if the nominee’s GAE are $250,000 or above.

In addition, for a nomination to be approved, there should be no information known to the Department, unless it is reasonable to disregard any such information, that the AMSR as determined by the sponsor for the nominated occupation, is inconsistent with Australian labour market conditions relevant to the nominated occupation.

What Is the Annual Market Salary Rate (AMSR)?

The AMSR is a defined term in the legislation, and refers to the amount of earnings that an Australian employee earns, or would earn, for performing equivalent work on a full-time basis, for a year and in the same workplace at the same location. ‘Earnings’ are guaranteed amounts and include wages, amounts applied or dealt with in any way on the nominee’s behalf or as they direct, and the agreed money value of non-monetary benefits.

The sponsor must determine what the equivalent Australian worker earns, or would earn, and provide a break-down of the monetary and non-monetary benefits to be included in the nominee’s salary package. The employer must also clearly set out how they have made this determination, based on the prescribed legislative requirements.

Relevant supporting evidence must be supplied with the nomination application in regard to how the employer has determined the AMSR amount. The type of information that is relevant in each case will depend on whether there is an equivalent Australian worker performing equivalent work on a full-time basis, in the same workplace and at the same location.

What Is The Temporary Skilled Migration Income Threshold (TSMIT)?

The AMSR for the nominated occupation, excluding any non-monetary benefits must not be less than the TSMIT (which is currently set at $53,900).

Non-monetary benefits are those benefits to which the person is entitled in return for the performance of work, or for which a reasonable money value has been agreed by the person and their employer (other than a payment of money). Therefore, any non-monetary benefits included in the equivalent Australian worker’s salary package (e.g. accommodation, clothing, meals, travel etc.) must be additional amounts above the TSMIT.

Under the regulations, the nominee must not be laid less than what an equivalent Australian worker would be paid. This means that the nominee’s GAE must not be less than the AMSR. This requirement cannot be waived, such that if the nominee will be paid less than the equivalent Australian worker, the nomination will be refused. Note the nominee can be paid the same amount as the AMSR (that is, they can be paid more that the equivalent Australian worker). This criterion can be disregarded in certain circumstances.

What Are The Labour Market Testing (LMT) Requirements For A Nomination Application?

The LMT criterion aims to ensure that the employer sponsor has ‘tested’ the local labour market to find Australian workers to fill the position being sought for the 457 visa replacement. The employer sponsored visa program is able to be accessed only if a suitably skilled Australian cannot be sourced by the employer. LMT generally involves advertising the position in Australia.

The method and period for LMT, as well as the evidence to be provided, is dependent on the visa stream being applied for. Be aware that exemptions and alternative arrangements may apply in certain circumstances.

The LMT requirements will be considered to be satisfied where:

  • the sponsor has undertaken LMT for the nominated position within the required period;
  • the LMT was undertaken in the prescribed method/manner;
  • prescribed evidence which demonstrates that LMT has been completed in accordance with the legislative provisions is supplied with the nomination application;
  • based on this evidence, and on any other information provided, the Department deems that there is no suitably qualified and experienced Australian worker, or eligible temporary visa holder, who is available to fill the nominated position.

LMT For Short-Term And Medium-Term Streams

LMT Period

The sponsor must have undertaken LMT:

  • within the 4 month period immediately before the nomination application is lodged; or
  • since any redundancies or retrenchments have been made (if any Australian workers have been made redundant or retrenched from the same or similar occupations in the business of the sponsor (or an associated entity) in the four months before lodgement of the application.

If the employer or an associated entity has made any Australian workers redundant or retrenched from positions in the nominated occupation in a business in the previous 4 months, information about these redundancies or retrenchments must also be provided with the nomination application.

Manner In Which LMT Must Be Conducted

For all nominations lodged on or after 1 October 2020, the following LMT requirements are prescribed:

  • the nominated position must have been advertised in Australia;
  • the advertisement was in English;
  • the position must have been advertised on the Government’s Jobactive website;
  • in addition to the advertisement on the Jobactive website, at least two advertisements were published in any of the below mediums:
    • on a recruitment website with ‘national reach’ in Australia. This would include:
      • prominent or professional recruitment websites that publish advertisements for positions throughout Australia, as well as industry specific recruitment websites relevant to the occupation that are in significant use by the industry;
      • LinkedIn’s online recruitment platform, except for job vacancies restricted to LinkedIn profile members;
      • The jobs portal of a general classifieds website.
      • This would not include the classifieds portal of a general classifieds website or an advertisement solely through a social media notification, such as Twitter or Instagram.
    • in print media with national reach in Australia
      • This would include national newspapers or magazines that are published at least monthly and marketed throughout Australia.
    • on radio with national reach in Australia
      • This would include radio programs that are broadcast or syndicated nationally.
    • if the sponsor is an accredited sponsor – on the approved sponsor’s website.
  • all advertisements included the following details:
    • the title, or a description, of the position;
    • the skills or experience required for the position;
    • the name of the approved sponsor or the name of the recruitment agency being used by the sponsor to undertake LMT; and
    • the salary for the position (if the intended annual earnings for the nominated position are lower than AUD96,400);
  • all advertisements accepted applications or expressions of interest for at least four weeks after they were first published.

Thus based on the above, please be aware that excluding the advertisement published on the Jobactive website, the nominated position may be advertised in:

  • the same medium (on two separate occasions);
  • any two different mediums simultaneously; or
  • any two different mediums on two separate occasions.

The advertising can be conducted by a third party if commissioned or authorised to do so by the sponsor (for example, by an associated entity or a contracted party, such as a recruitment agency). There is no requirement for the sponsor to run the advertisement themselves.

Thus in order to meet the LMT criteria, the applicant must provide evidence to demonstrate a total of 3 advertisements, including an advertisement published on the Government’s Jobactive website, at the time the nomination is lodged.

Required Evidence Of LMT

A copy of all advertising material used to advertise the position must be provided with the nomination application.

Note that due to the severe disruption to the labour market that has resulted from the COVID-19 pandemic, with many Australian workers having become unemployed or had a reduction in their pay, conditions and the number of hours they work, the Australian Government recently made changes to enhance the LMT requirements in order to ensure that Australian workers are prioritised for job opportunities in Australia. These changes (which relate to the manner in which LMT must be undertaken) are incorporated in the discussion above and apply to all nominations lodged on or after 1 October 2020.

A further point regarding LMT is that in certain circumstances (referred to as ‘select occupations’ and ‘select positions’), the standard LMT requirements (in regard to the manner, period and timing in which LMT is undertaken), as discussed above, do not apply/are varied. These requirements need to be confirmed, as applicable.

LMT For Labour Agreement Stream

To apply for a Labour Agreement, evidence of LMT must be provided.

When applying to nominate an overseas worker under a Labour Agreement, the sponsor must provide evidence of LMT in accordance with the requirements as specified for the relevant labour agreement.

Note that LMT is not required to be undertaken in certain circumstances.

Visa Application

The final step in the TSS employer sponsorship process if for the visa applicant to apply for the visa 457 replacement on their own behalf.

To qualify for 457 replacement visa grant, the visa applicant must demonstrate that they are appropriately qualified and have the skills required to perform the nominated position. They must also meet English language, health and character requirements (as applicable). Specific criteria also apply to each stream. An age limit does not apply to the 457 replacement visa.

Get More Information About The Employer Sponsored Visa

We have prepared an article on the Subclass 482 – A Guide to Temporary Skill Shortage, which provides a general overview of the 457 visa replacement and matters which you, as the employer sponsor, and the nominee, will need to address if you are seeking to apply under the employer sponsorship visa program.

You can also read about the various types of skilled visas available, the key aspects related to skilled migration and links to further information to take note of when applying for a skilled visa in our article on the Australian Skilled Migration Visa List

Some Final Comments On The TSS Visa Program

In closing, it is important to point out that it is vital before you embark on an employer sponsored visa application, that you undertake comprehensive research on what the program entails, the requirements that would apply to your particular situation, the sponsorship obligations that you will be required to abide by, and all other relevant matters pertaining to an employer sponsorship.

In some cases, you may find that the subclass 482 is not necessarily the best visa for you to utilise to sponsor a worker. This is because the 482 visa carries some more obligations and costs for the sponsoring business than some of the other choices available.

For example, if the nominee is eligible for a general skilled migration visa, which allows them to access a visa in their own right without sponsorship, this may be a preferable option in some circumstances. In this case, the employer does not need to be involved at all and is not generally within the purview of the immigration law (besides some fundamental legal aspects, such as employing illegal workers).

So before your business proceeds with a 482 sponsorship, it is important to consult a professional to ensure you are making the right decision  – there may be a far cheaper and more efficient option – that carries less risk as well!

As always, the devil can be in the detail. We understand the Australian commercial framework as well as Immigration law, allowing us to represent businesses more completely for sponsorship applications. Financial data, legal entity information, compliance aspects are all part of our day to day experience so we can help you navigate the regulations efficiently, without any surprises.

If you are an employer thinking about sponsoring a foreign worker, contact us for a no obligation, confidential discussion about your options.

* * * * * * * * * * * *

In conclusion, we note that the above discussion provides an overview of the employer sponsored visa program for the 457 Visa Replacement. Australia’s migrations laws are complex, and each case is different. We recommend that you seek professional advice before you proceed with applying for a 457 Visa Replacement, as being fully informed about the process and requirements that apply will give you the best chance of achieving a successful outcome on your application, and thus lessen the chance that it will be refused. A migration professional can help you to do this. Start off on the right foot by contacting PAX Migration Australia today.

For up-to-date advice on a 457 Visa Replacement, book your confidential consultation with a migration agent in Adelaide. PAX Migration Australia is a leading immigration advice service based in Adelaide.

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Sources/Links:

Australian Government – Jobactive

https://jobactive.gov.au/