Employer Sponsorship Obligations: What Sponsors Must Do
Australian employers who sponsor overseas workers take on legally binding obligations that extend beyond simply hiring the worker. These include paying at least the nominated salary, providing equivalent working conditions, maintaining records, notifying the Department of changes, and cooperating with monitoring visits. Failure to meet obligations can result in sanctions including fines up to $99,000 per breach for individuals and $495,000 for companies, cancellation of sponsorship, and being barred from future sponsorship.
Quick Facts
| Obligation | Requirement |
|---|---|
| Salary | At least TSMIT or market rate (whichever is higher) |
| Working conditions | No less favourable than Australian workers |
| Record keeping | Maintain for 2 years after sponsorship ends |
| Notification period | 28 days for most changes |
| Travel costs | Must pay reasonable travel costs for departure |
| Monitoring | Cooperate with Department inspections |
| Duration | Obligations continue for 2-5 years after visa ceases |
Core Obligations
Pay the Nominated Salary
The most fundamental obligation. You must pay the sponsored worker at least:
- The TSMIT ($73,150 for Core Skills), AND
- The annual market salary rate for the position
Whichever is higher. This salary must be paid in full, on time, and cannot be reduced without notifying the Department. Paying below the nominated rate is one of the most common and most seriously penalised breaches.
What this means in practice:
- No unpaid overtime that would bring the effective hourly rate below the nominated equivalent
- No salary sacrifice arrangements that reduce cash salary below TSMIT
- No deductions for accommodation, training, or sponsorship costs that reduce take-home pay below the threshold
Equivalent Working Conditions
Sponsored workers must receive terms and conditions of employment no less favourable than an equivalent Australian worker in the same workplace. This includes:
- Hours of work
- Leave entitlements (annual, personal, long service)
- Workplace health and safety protections
- Superannuation contributions
- Access to workplace facilities and benefits
Employment in the Nominated Occupation
The sponsored worker must be employed in the occupation nominated in the sponsorship application. You cannot sponsor someone as a software engineer and have them working as a help desk operator. The occupation must match the ANZSCO code specified in the nomination.
Some flexibility exists for "closely related" duties, but the core responsibilities must align with the nominated occupation.
Only at the Nominated Location
The worker must be primarily employed at the location specified in the nomination. If business needs change and the worker needs to relocate, the employer must notify the Department and may need to lodge a new nomination.
Notification Obligations
Sponsors must notify the Department within 28 days of certain events:
About the business:
- Change of business name or address
- Change of ownership or control
- Business ceases trading or becomes insolvent
- Sponsor no longer requires the sponsored worker
About the worker:
- Worker's employment ceases (for any reason — termination, resignation, redundancy)
- Worker's role changes significantly
- Worker's work location changes
- Worker fails to commence employment
About the sponsorship:
- Sponsor wants to withdraw a nomination
- Circumstances that may affect the sponsorship approval
Failing to notify is itself a breach of obligations, even if the underlying event isn't problematic.
Record-Keeping Obligations
Sponsors must maintain detailed records about their sponsored workers and keep them for at least 2 years after the sponsorship obligation period ends.
Records to maintain:
- Employment contracts and agreements
- Payslips and salary records
- Working hours records
- Leave records
- Position descriptions and duties
- Evidence of training provided to Australian employees
- Correspondence with the Department about the sponsorship
- Evidence of labour market testing (if applicable)
These records must be made available to the Department upon request. A monitoring officer can attend the workplace and request records with reasonable notice.
Travel Cost Obligation
If a sponsored worker's visa is cancelled or ceases, the sponsor must pay reasonable travel costs for the worker (and their family members, if applicable) to leave Australia.
This applies even if the worker resigned or was terminated for cause. The obligation exists to ensure that sponsored workers aren't left stranded in Australia without means to return home.
"Reasonable travel costs" means economy airfare to the worker's home country. The sponsor can arrange the travel directly or reimburse the worker.
Monitoring and Compliance
The Department of Home Affairs actively monitors sponsor compliance through:
Random Inspections
Department officers can visit the workplace to verify:
- The sponsored worker is present and working in the nominated occupation
- Working conditions match the nomination
- Records are being maintained
- The position is genuine
Data Matching
The Department matches sponsorship data with:
- ATO (tax office) records — to verify salary payments
- Fair Work — to check for workplace complaints
- State workplace safety bodies — to identify safety issues
Tip-offs
The Department investigates complaints from:
- Sponsored workers themselves
- Other employees
- Unions
- Members of the public
Workers who report sponsor breaches are protected from retaliation. The Department takes reports of exploitation seriously.
Penalties for Non-Compliance
Administrative Sanctions
- Warning notices
- Infringement notices (fixed penalty amounts)
- Additional monitoring requirements
- Conditions imposed on the sponsorship
- Barring from further nominations for a period
- Cancellation of sponsorship approval
Civil Penalties
Courts can impose civil penalties of:
- Up to $99,000 per breach for individuals
- Up to $495,000 per breach for companies
Common civil penalty breaches include failing to pay the nominated salary, failing to maintain records, and failing to notify the Department of changes.
Criminal Penalties
Serious or deliberate breaches can result in criminal prosecution with penalties including:
- Imprisonment
- Criminal fines
- Bans on company directorship
Criminal prosecution is reserved for the most egregious cases — typically involving deliberate exploitation, fraud, or repeat offending.
Cost Recovery from Workers (Prohibited)
Sponsors are specifically prohibited from recovering the following costs from sponsored workers:
- Sponsorship application fees
- Nomination fees
- Skilling Australians Fund levy
- Migration agent fees related to the sponsorship or nomination
- Any other costs associated with the sponsorship process
The visa application fee ($2,770) is technically the worker's responsibility, but some sponsors choose to cover it. Requiring the worker to repay sponsorship costs through salary deductions or other arrangements is illegal and constitutes a breach.
How Long Do Obligations Last?
Sponsorship obligations don't end when the worker's visa expires or when they leave the company.
During employment: All obligations are active.
After employment ends: Most obligations continue for a defined period (typically 2-5 years depending on the specific obligation). Record-keeping obligations continue for 2 years after the obligation period ends.
After sponsorship approval expires: Obligations related to workers nominated during the sponsorship period continue even after the sponsorship itself expires.
Best Practices for Sponsors
- Assign a responsible person in the business to manage sponsorship compliance
- Create a checklist of notification triggers and deadlines
- Use a payroll system that tracks and flags sponsored worker salary payments
- Schedule regular audits of sponsorship records
- Maintain open communication with sponsored workers about their conditions
- Seek legal advice before making changes to sponsored workers' employment conditions
- Report issues early — proactive notification is viewed more favourably than being caught in a breach
Frequently Asked Questions
What if I need to make the sponsored worker redundant?
You can make a sponsored worker redundant, but you must notify the Department within 28 days. You must also pay the worker their entitlements (redundancy pay, notice, etc.) and cover reasonable travel costs if they need to leave Australia.
Can I reduce the sponsored worker's hours?
Reducing hours below the level specified in the nomination may breach your obligations. If the effective salary falls below TSMIT or the market rate, it's definitely a breach. Discuss any changes with the Department before implementing them.
What if the worker wants to change jobs?
The worker can leave, but they have limited time (60 days) to find a new sponsor. Your notification obligation triggers immediately — inform the Department within 28 days that the worker has ceased employment.
Do obligations apply to workers who've become permanent residents?
Generally, no. Once a sponsored worker becomes a permanent resident, most sponsorship obligations cease. However, record-keeping requirements may continue for the defined retention period.
