Standard Business Sponsorship – Obligations To DIAC & Employees

Once a business obtains Standard Business Sponsorship, it will be subject to the following obligations in relation to DIAC and its 457 visa holder employees:

Obligations to 457 visa holder employees

Unless otherwise specified, the below obligations which relate to the 457 visa holder (and/or dependent 457 visa holders) are imposed on the sponsor while the visa holder is an employee of the business and the 457 visa nomination approval is under the business SBS.

Unless specified, the below obligations end when:

  1. The 457 visa holder changes sponsor (i.e. visa holder ceases employment with the business and commences employment with another sponsor once the nomination application for that sponsor has been approved); or
  2. The 457 visa holder is granted another substantive visa other than a 457 visa; or
  3. The 457 visa holder leaves Australia and their 457 visa expires.

Offer equal terms and conditions of employment – ‘Market Rate Requirement’

The sponsor must demonstrate that the 457 visa applicant’s terms and conditions of employment are no less favourable than that of an ‘equivalent Australian’ (that is an Australian citizen or permanent resident employee of the sponsor that is performing equivalent work and is working in the same location).

This obligation does not apply if the applicant 457 visa holder’s guaranteed annual earnings is $180,000 or greater.

For a labour agreement, the sponsor must ensure that overseas workers receive remuneration as specified in the agreement.

Please see further explanation in relation to base salary, ‘guaranteed annual earnings’ and satisfaction of this requirement.

Ensure that the sponsored employee only works in the occupation approved in the nomination application

The sponsor needs to ensure that the primary visa holder only works in the occupation that is approved under the 457 nomination application.

If there is natural progression and development in the 457 visa holder’s role such that he or she takes on a few extra responsibilities, or the exact nature of his or her duties change to reflect the move to a more senior position, such changes are probably allowed.

If the business wants the 457 visa holder to move into a completely different role, or wants to change his or her duties significantly, then the sponsor will probably need to lodge a new nomination application. DIAC needs to approve the nomination application before visa holder can move into the new role, or change his or her duties significantly.

The duties of the visa holder’s occupation needs to include a significant majority of the duties of the position as listed under ANZSCO. If the changes to the 457 visa holder’s role or duties and responsibilities are such that the ANZSCO which was approved for his or her nomination is no longer appropriate, then the sponsor will need to lodge a new nomination application.

Sponsor to only engage the primary 457 visa holder as an employee (less exception applies)

The sponsor must ensure that there is an employer-employee relationship between it and the sponsored primary 457 visa holder. There are two exceptions to this rule:

  1. For a standard business sponsor operating in Australia, the primary visa holder can work for associated entities;
  2. The primary sponsored person’s occupation is an exempt occupation

Sponsor cannot recover certain costs from a primary or dependent 457 visa applicants

The sponsor cannot recover or seek to recover all or part of the following costs:

  1. Costs that relate specifically to the recruitment of the primary applicant, or
  2. Associated with becoming or being an approved sponsor or former approved sponsor (this includes migration agent costs for assisting with the SBS or 457 visa applications)

This obligation is imposed once the SBS or labour agreement is approved. It ceases two years after the following events have occurred:

  1. SBS or the labour agreement ceases, and
  2. There are no primary or secondary sponsored persons in relation to the sponsor.

Payment of return travel costs

When a 457 visa holder ceases employment with the business (or when his or her 457 visa expires, at which point they can no longer work for the employer anyway unless he or she is subsequently granted another visa with work rights), the primary or dependent 457 visa holders, or DIAC acting on behalf of the visa holder, can make a written request to the business to cover the reasonable and necessary travel costs to allow the visa holder to leave Australia.

When the business receives such a written request, it will need to complete the following in order to discharge this obligation:

  1. Cover the travel cost from the visa holder’s usual place to residence to the place of departure
  2. Cover travel cost from Australia to the country specified in the written request (for which the person holds a passport)
  3. The business needs to provide for economy class air travel or, where unavailable, a reasonable equivalent
  4. These costs need to be paid within 30 days of receiving the written request

This obligation applies while the visa holder is an employee of the business and the 457 visa nomination approval is under the business SBS.  This obligation ends when the 457 visa holder change sponsorship to another employer,  is granted another substantive visa other than a 457 visa or when the individual leaves Australia and is no longer the holder of a 457 visa.

If the business does cover the travel cost in satisfaction of this obligation, the business needs to notify DIAC within 10 working days of paying for the cost that it has made such a payment.

Obligations to the Department of Immigration & Citizenship 

The above obligations are imposed once the SBS or labour agreement is approved. These obligations cease two years after the following events have occurred:

  1. SBS or the labour agreement ceases, and
  2. There are no primary or secondary sponsored persons in relation to the sponsor.

No record needs be kept for more than 5 years under the below obligations.

Obligation – Notify DIAC of Certain Notifiable Events

On this page, DIAC has outlined the events that it needs to be notified of and when DIAC needs to receive these notifications.

At the bottom of the page, you will now the various email addresses and post office address that you should use for sending DIAC the various notifications to. You need to send the notification through to the relevant state’s monitoring unit, which is the state in which the head office of the sponsor is located.

Ensuring compliance with this obligation, like with the obligation for keeping relevant and required records, requires the business to education its staff to ensure that they have knowledge of the current sponsorship obligations.

Obligation – Keep Records

On this page, DIAC has outlined what records must be kept by the business. These records and documents need to be kept in case this information is requested by DIAC. DIAC may also monitor the business in relation to its compliance with its sponsorship obligations, or the business may be subject to investigation by inspectors. The documents that the business is required to maintain in order to satisfy this obligation are likely to be requested for the purpose for any monitoring or investigation.

All of the records must be kept in a reproducible format and must be capable of verification by an independent person.

There is no specific format in which you must keep your records. The general principles of good record keeping and management applies.

To really ensure compliance with this obligation, the business should ensure that the person or team that manages the business’ 457 visa population has a clear and up-to-date understanding of the business’ obligations as a sponsor. Many of the obligations also require the business to keep records in relation to how the business has complied with the obligation.

For instance, if the business receives a written request from a 457 visa holder who has ceased employment to cover the cost of his or her return travel, the business should keep records of all correspondence as well as receipts and invoices for the costs that it incurs in discharging this obligation.

If the business has an Australian citizen or permanent resident employees that are working in the same position and location as a 457 visa holder, then the business needs to keep records to show that the terms and conditions of employment for the 457 visa holder continues to be at least as favourable as the Australian employee. If the Australian employee’s salary increases to be above that of the 457 visa holder, then the business may be required to increase the salary of the 457 visa holder to match that of the Australian.

Some migration agent firms are able to offer you services that assist you with making the right notifications to DIAC. However, even with the assistance of such services, your own staff still need to have a firm grasp of the sponsor’s obligations in order to correctly identify notifiable events, why retaining certain documents is important (and preferably, which obligations these documents relate to) and also pre-empt or identify breaches of the sponsor’s obligations.

Obligation – Provide Records & Information to the Minister

This obligation follows on from the obligation to keep records. It may be imposed as part of a DIAC investigation or monitoring. The sponsor is to provide records or information if the sponsor is required to keep such documents due to a legal obligation, under sponsor’s obligations or under the terms of the labour agreement.

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21 thoughts on “Standard Business Sponsorship – Obligations To DIAC & Employees

  1. Sponsorship in Australia

    Thanks for the sharing of such information. we will pass it on to our readers. This is a great reading. Thanking you

    Reply
  2. Thomas

    I worked in Australia on an employer sponsored 457 Visa. My family accompanied me and were also on the 457 Visa. After about 7 months, I was laid-off. I sent a written request for the employer to provide transportation from my place of residence in Australia to my home in the USA for myself and my family. They did arrange and pay for flights but not transportation from my residence to the airport. Now that I am back in the USA, the company keeps contacting me to recover the costs of the flights. Can they legally do this? Am I obligated to pay them back for the flights to leave Australia?

    Reply
  3. sam

    Hi PC,
    I am working at a 7-11 in Melbourne and employer wishes to sponsor me as an retail manager on a 457 visa. Please advise whether it is possible for a convenience store to sponsor someone on 457 visa.I hold cert III food processing(retail baking), cert III in commercial cookery, Cert IV in business, Diploma of management. My wife is working there as well in the 7-11 and she holds Masters in business administration- human resource. What would u reckon about 457 Visa being a good option for us and whether it is possible or not. The turnover for 7-11 is around $1 million and is around 5 months since the new owner has taken over. He is happy to pay me minimum salary required. Please advise whether 457 can be possible here and what are the requirements for employer and minimum salary benchmark.

    Regards
    SM

    Reply
    1. Peng Cheng Post author

      I can’t determine whether you’ll get a 457 visa without doing an assessment. You may be eligible – honestly can’t confirm.

      Reply
  4. dev

    hi!! i got 457 visa and now owner selling the business an new owner do not want to hire me. i am married here and we are from 2 different countries. and in case we have to leave the country we have to be apart, which we do not want. in that case is there any othere way we can stay in australia without having anyone to sponsor. or can i apply for ENS. because i just got 457 5 months ago. thank u

    Reply
      1. Han

        Hi Peng, I have very complex issue raise in my 857 application (decision ready). I am wondering if the visa is refused or cancel. I am considering all of those consequences. I am holding a student visa currently because when that employer lodged the nomination, my visa was running out and I had to leave the job and apply student visa to remain in australia. but after a few months the nomination approved and the employer asking when I was going to come back and I explained that I will be able to come back to to work fulltime when my PR is granted. but after 7 months period since I lodged my visa, I have not heard anything from DIAC. I just contacted DIAC and I was told will be allocated visa next week (which is this week). furthermore, the position at that restaurant has been filled by someone else. what are my possibilities? what should I do next? this is a difficult time for me. because I would be blacklist if they refuse or cancel the application as DIAC assumes its not a genuine.

        Reply
        1. Peng Cheng Post author

          Hi Han,
          If the nominated role has been filled, and you are no longer required for this role because the visa is approved then you no longer meet the requirements for the visa. Technically, your employer should withdraw the nomination application. This is a matter for you to discuss with your employer.
          PC

          Reply
  5. Brandon Farrell

    Hi Peng,

    I have sponsored a member of my staff under a 457 visa, and due to some family issues, I now need to sell my business and leave Australia.

    Is the 457 transferrable to the new owners of my business? Or does my staff member need to reapply under someone else?

    thanks,

    Brandon

    Reply
    1. Peng Cheng Post author

      Hi Brandon,
      The new owner would need to apply for Standard Business Sponsorship, and if this is approved, lodge new 457 nomination applications to change the sponsorship over to the new employer.
      PC

      Reply
  6. Shane

    Hi Peng,

    I am currently on 457 visa, but I have just found out that the owners of the business is going to sell their business. I would have to mentioned that the ABN that was used with my application was registered as a PARTNERSHIP not as a company. From what I have gathered, if the owner sell off the business then the ABN would change, then I would have to start the process again from zero and could I just write a letter to immigration telling them that there has been a change of owner. The business and everything else is all the same except the new owner.

    Regards,

    Shane

    Reply
    1. Peng Cheng Post author

      Hi Shane,
      If the ABN changes, then the new legal entity that is your employer would need to apply for SBS, and transfer your 457 visa sponsorship over to it.
      PC

      Reply
  7. Sam

    Hi Peng

    I am having 457 visa from last 20 months as a cook. I got increment only once in this period .now my annual salary package is in between rate of pay and guaranteed annual earnings .Is that ok .
    How can I apply for EOI.&also do i need to give skill assessment test

    Reply
    1. Peng Cheng Post author

      Hi Sam
      I don’t understand your question in relation to salary. You can apply for a 189, 489 or 190 visa as A 457 visa holder.
      You will need a positive skill assessment in an eligible occupation if you want to apply for a 189, 489 or 190 visa.
      PC

      Reply
      1. Pinkesh

        Hi peng

        Actually my friend recently buy exiting business which runs as a cafe and patisserie and he want to sponser me as a pastry cook 457 visa.How many days time to take for business approval ?did he wait for BAS statements?Howmany days must require LMT?please inform me.

        Thanks for your time.

        Reply
        1. Peng Cheng Post author

          Hi Pinkesh,
          Processing time for SBS is around 2-4 weeks.
          BAS will be required.
          Advertising for around 2-3 weeks is required.
          PC

          Reply
  8. Ti

    Hi,
    My employer is going to apply for SBS and my current visa is due to expire soon. Will I be granted a bridging visa after they apply SBS and nomination at the same time even though the SBS is not approved yet?

    Reply
    1. Peng Cheng Post author

      Hi Ti,
      You need to lodge a valid 457 visa application. Lodging a SBS or 457 nomination application doesn’t result in the grant of a bridging visa.
      PC

      Reply
      1. Ti

        So if I lodge SBS, nomination and my application at the same time, I’ll get bridging visa before the SBS is approved?

        Reply
        1. Peng Cheng Post author

          After you lodge a valid 457 visa application, you should receive the grant of the bridging visa A shortly after this.

          Reply

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