Australian employer sponsored visa costs – who pays?

The Australian Government has clear regulations regarding visa sponsorship costs and failure to comply can result in penalties, including visa refusals, cancellations, fines or imprisonment. Employers looking to sponsor skilled workers in Australia should understand who can legally pay for visa-related costs to ensure compliance.

This article explains the rules surrounding employer sponsored visa costs to help employers remain compliant with Australian immigration law. We focus on the following visas:

• Subclass 482 Skills in Demand visa (SID) (formerly the Temporary Skills Shortage visa)
• Subclass 494 Skilled Employer Sponsored Regional (SESR) (Provisional) visa
• Subclass 186 Employer Nomination Scheme visa (ENS).

Employer responsibilities for visa costs

Employers sponsoring overseas workers are required to cover specific costs associated with the sponsorship process. These include:

• sponsorship and nomination fees: Employers must pay the costs associated with becoming a standard business sponsor and nominating an employee for a visa
• Skilling Australians Fund (SAF) levy: This training contribution must be paid by the employer at the time of nomination. The levy amount depends on the business’s turnover and the proposed employment period. We explain the SAF levy in more detail here.
• recruitment costs: Any costs related to advertising or recruiting for the position must be paid by the employer and cannot be recovered from the employee. Costs include travel expenses to Australia and visa costs if used as part of a recruitment strategy
• migration agent or legal fees: An employer must pay for any professional fees associated with preparing and lodging a sponsorship or nomination application.

Costs that can be shared or paid by the employee

While employers must pay the above expenses, other costs may be shared with or covered by the visa applicant. For the subclass 482 SID and subclass 494 SESR visas, these include:

• visa application fees: While the employer can choose to pay for the visa application fee, it is not a legal requirement. Employees can cover their own application fees if agreed upon. In some cases, employers may choose to pay the cost for the sponsored employee, but ask the employee to cover the visa costs for their partner or children
• migration agent or legal fees: If both parties agree, the employee can pay for their own migration agent or lawyer’s fees for visa assistance only
• miscellaneous costs: Visa applicants are typically responsible for covering their English tests, document translation costs, medical examinations and police clearances, unless the employer voluntarily agrees to pay.

For the subclass 186 ENS visa, employees can pay all costs except the SAF levy. The Australian Government expects employers to pay the nomination application charge, but it is not a legal requirement.

Prohibited practices

Under Australian migration law, it is illegal for employers to recover sponsorship-related costs from employees or deduct these from their salaries. Key prohibited actions include:

• requiring employees to reimburse sponsorship, nomination, or SAF levy fees
• deducting visa costs from an employee’s salary or benefits
• setting up arrangements that indirectly transfer visa costs to the sponsored worker.

Employers found to be engaging in such practices may face penalties. However, employers are permitted to enter into a loan agreement with an employee for their visa costs or insert a clawback clause into an employment contract to recover visa-related costs. Any loan or clawback agreement must only cover the costs an employee is able to pay and must not seek to recover sponsorship, nomination or recruitment costs.

Employers should obtain legal advice to ensure compliance with both the Fair Work Act and Migration Act before entering into the above agreements.

Best practices for employers

To remain compliant and avoid legal risks, employers should:

• clearly document visa cost arrangements in employment contracts
• ensure all payments for mandatory sponsorship and nomination costs are made directly by the business
• avoid any informal agreements or verbal arrangements that could lead to violations
• seek professional legal advice if uncertain about cost sharing arrangements.

By understanding and following these guidelines, employers can ensure a smooth and legally compliant visa sponsorship process, helping them to attract and retain skilled workers while avoiding regulatory breaches.

If you have any questions regarding your sponsorship obligations, please get in touch with our team below or contact us here.

Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Rebecca Macmillan

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