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Crime doesn’t pay: the consequences of charging for migration outcomes

18 May 2016


Crime doesn’t pay: the consequences of charging for migration outcomes

Adriana Bedon, Senior Associate

Charging for a “migration outcome” or a “sponsor-related event” has become a criminal offence and the subject of steep penalties: The Department of Immigration and Border Protection (“DIBP”) is honing in on the growing incidence of employers and/ or recruiters seeking to derive a “benefit” from securing a migration outcome from prospective visa candidates, or such employees open to providing sponsors with a benefit to facilitate their stay in Australia.

Whilst visa scams are the first thing that comes to mind, the manner in which a person can derive a “benefit” from such a scenario is broader than first appears and the policy implications are significant.

Background

The Migration Amendment (Charging for a Migration Outcome) Bill 2015 was introduced on 17 September 2015 (and entered into effect on 14 December 2015) following an independent report on what’s been dubbed as “payment for visa activity”. This refers to a scenario in which an employer sponsor requests payment from a nominee in return for procuring a migration outcome on their behalf. This practice has always been unlawful as it strikes at the integrity of Australia’s visa programmes that are designed to address genuine skill shortages in the Australian labour market.

The Senate’s Legal and Constitutional Affairs Legislation Committee inquiry reported that this activity is prevalent amongst employers and migration agents involved in sponsoring subclass Temporary (Work) Skilled (Subclass 457) visa applicants, particularly by way of clawing back migration agent fees or additional payments from employees once their 457 visa has been granted.

Changes introduced

The Migration Amendment (Charging for a Migration Outcome) Act 2015 introduces new criminal and civil penalties as well as visa cancellation provisions to be imposed on either a person who seeks to derive a benefit from a visa applicant in return for a “sponsorship-related event”, or from a visa applicant who provides such a benefit in that context.

In essence, this legislation prohibits sponsors, nominators, employers or other third parties from making a personal gain from their position by requiring payment in return for processing a visa sponsorship arrangement. Current or prospective visa holders seeking permanent residence, or an opportunity to work in Australia by providing a benefit to an employer for a job are also subject to consequences. These changes extend beyond the scope of the Temporary (Work) Skilled 457 program.

Where prior legislation classed activities such as the clawing back of migration agent costs, and any related recruitment costs from subclass 457 visa applicants as a breach of sponsorship obligations subject to penalties and sanctions, the new legislation imposes criminal and civil penalties as well as imprisonment sentences.

Potential consequences under the new legislation are summarised below:

  • up to two years imprisonment;
  • penalties of up to $324,000 for a body corporate, (and $64,000 for an individual); for each instance a person requests or receives a benefit in return for sponsorship, or a sponsorship related event;
  • civil penalties of up to $216,000 may apply to people found to have offered or provided a benefit in return for a sponsorship event occurring;
  • visa holders involved in such activities (temporary or permanent residents) may be subject to the new discretionary power to consider cancellation of their visa; and/or
  • visa applicants who are found to be involved in such activities whilst in the process of applying for a visa will have their applications refused.

Practical measures implemented

Sponsors and nominators will be required to acknowledge in a statement in the application that there has been no payment for visa activities under the “paying for visa sponsorship certification requirement”. Visa applicants will also be presented with an additional declaration on their application forms, which require their acknowledgement and compliance with the “paying for visa sponsorship – declaration requirement”.

This is a time of application requirement and works in tandem with the DIBP’s intention that this certification be incorporated into online application processes. As such, in order to comply with application requirements, nominators and applicants must comply with such certifications when lodging an application.

Flow on effects

In the same vein, a new policy has been introduced directing case officers to increase the scrutiny on employer sponsored nominations when assessing whether an occupation is genuine, and to consider whether the position has in fact been created to facilitate an applicant’s entry, or stay in Australia (or their family members’).

Such policy has the potential to complicate visa applications for self-sponsoring business owners via the Temporary (Work) Skilled 457 visa program, or sponsoring their family members.

This increased scrutiny will equally apply to working holiday visa holders applying for subsequent sponsored employment whilst in Australia. The rationale behind this is that sponsored employment should only be offered when a genuine recruitment need arises.

In these circumstances, where local recruitment attempts have been exhausted, this should lead recruiters to seek such skills offshore. However, in practice it can be the case that such offshore skills happen to be onshore on a working holiday visa when this need arises. For sponsors in this situation, such applications should be prepared with added caution.

As a consequence of this new policy the chance of a refusal is higher if certain risk indicators are found in an application. These risk factors are indicated below:

  • the nominee is a relative or personal associate of an officer of the sponsoring business;
  • the nominee is a director or owner of the sponsoring business;
  • the nominee is currently in Australia as the holder of a 417 visa;
  • the salary level is inconsistent with other workers in the occupation (for example, if the nominated salary is significantly lower than industry standards for the nominated occupation);
  • the business has indicated on the application form that they have received a payment from the nominee for lodging the nomination; and/or
  • the nominee has indicated on their visa application form that they have made a payment (or entered into an arrangement to make a payment) to the proposed employer for nominating them.

The direction also specifies that the size of a business, length of operation and the number of Australian employees is to be taken into consideration in determining whether the nominated role is genuine.

It should be noted that this direction is a policy change and not a legislative change. This means that nominations presenting such risk indicators will not be necessarily be refused but may be subject to requests for further information, or a genuineness submission to substantiate that the nominated role is legitimately required by the sponsor’s business.

This update serves as a timely reminder to review your organisation’s migration sponsorship practices and supporting policies for compliance with current and evolving legislation. If in doubt, contact your People + Culture Strategies advisor.

Key Takeaways

  • Employer sponsors should review contracts and letters of offer to ensure that no reimbursements, claw backs or other arrangements that can result in a “benefit or charge” are presented to a prospective visa holding employee or applicant.
  • Employers should amend existing mobility and recruitment policies in light of such changes.
  • Self sponsors (i.e. business owners sponsoring their own visas), and/or their family members should seek professional advice in preparing sponsored visa applications.
  • Sponsors looking to employ working/ holiday visa holders should seek professional advice in preparing applications.

 

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