IMPACT – MEDIUM

What is the change? Australia’s Federal Court has ruled that a Darwin company must pay nearly A$126,000 to 457 visa holders the company employed and more than A$26,000 in unpaid taxes.

What does the change mean? The company, Choong Enterprises Pty Ltd, was also fined A$175,000 for 457 programme violations in April; it now faces a tab topping A$335,000. The Australian Government’s aggressiveness in pursuing legal action is a sign of how serious officials are taking 457 sponsorship violations. At the same time, officials have stressed that the vast majority of 457 sponsors comply with programme requirements.

  • Implementation time frame: The Federal Court ruling was issued 4 June.
  • Visas/permits affected: Subclass 457 visas.
  • Who is affected: Employers sponsoring 457 visa holders.
  • Business impact: The ruling is another sign that businesses that fail to follow 457 sponsorship requirements face the possibility of harsh penalties.
  • Next steps: Employers should be vigilant to ensure that they are in compliance with all 457 sponsorship requirements.

Background: Australia’s Subclass 457 visa allows skilled workers to enter and work in Australia for up to four years. Employers participating in the 457 programme must satisfy industrial relations regulations and meet a number of requirements, including minimum salary and labour market testing.

In the recent case, the Federal Court found that Choong Enterprises failed to provide minimum terms and conditions of employment, failed to keep proper records and illegally recovered funds from visa holders for migration agent fees. Some workers were found to have worked for 60 hours a week at A$12 per hour and were not given sick leave or extra pay for overtime hours and public holidays.

The ruling is just one example of Australia’s efforts to crack down on 457 programme abuse. Government officials have stressed, however, that, on the whole, the programme benefits the Australian economy and that the vast majority of 457 sponsors comply with the programme’s requirements.

Cracking down on abuse is a key component of the Government’s recently announced overhaul of the Subclass 457 visa programme. Assistant Minister for Immigration and Border Protection Michaelia Cash said in a statement about the Choong Enterprises case that the Government has “no sympathy for those who abuse our migration programme and blatantly disregard laws that are in place to protect workers and legitimate business owners.”

BAL Analysis: Though most 457 programme sponsors follow the rules, the Government’s focus on 457 violations is a reminder of the importance of complying with visa guidelines. Penalties can be harsh and may include fines, sanctions and legal action. Contact a BAL Migration Agent if you have any questions about staying in compliance with Subclass 457 or other visa requirements.

This alert has been provided by BAL Australia. For additional information, please contact australia@bal.com.

MARN: 9683856

Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.