Australia: Fair Work Inspectors now checking employers comply with Immigration law obligations

Last Updated: 2 October 2014
Article by Jackson Taylor


Fair Work Inspectors are using additional powers as Immigration Inspectors to check the immigration status and work rights of employees and contractors. Recent reports suggest that Fair Work Inspectors are conducting a number of immigration checks on employers when conducting site inspections. Employers are now more likely to be investigated for potential breaches of immigration laws.


All Australian businesses have an obligation to only employ staff with the right to work in Australia. Businesses which are registered to sponsor overseas staff for employment, training, or other purposes, have additional obligations under immigration laws.

Fair Work Inspectors now have the power to check that employers are meeting these obligations. Failure to do so can result in significant penalties, including fines or even imprisonment, for businesses. Where the law is breached knowingly or recklessly the period of imprisonment for executive officers can be up to 2 years.

Managing immigration obligations can be challenging and businesses must consider whether they are compliant with immigration laws or risk facing serious penalties.


All Australian employer have obligations under the Migration Act. Employers must not employ staff or contractors without the right to work in Australia and severe penalties can apply to any who breach these laws.

In 2013 the Federal Parliament passed the Migration Amendment (Reform of Employer Sanctions) Act which made it a strict liability offence to employ a person, allow a person to be employed, or refer a person for work, without work rights in Australia. This includes both employees and contractors.

The consequences of these laws are far reaching, in particular the additional responsibility for contractors or others engaged through a contract for service. As a strict liability offence it does not matter if an employer is not aware of these laws or that an individual is not allowed to work in Australia. Unless employers have taken reasonable steps to verify that the person is allowed to work they are in breach of these laws.

To comply with the legislation employers must take certain steps to verify that they only employ people with Australian work rights. Some of the necessary steps include:

  • Maintaining records for all new and existing employees which show Australian citizenship, permanent residency, or NZ citizenship;
  • Maintaining records of all temporary visa holders' work rights;
  • Checking work rights of temporary visa holders using the Department of Immigration's Visa Entitlement Verification Online system every 3 months for the duration of their employment.

The legislation introduced three tiers of penalties up to and including fines and imprisonment. Periods of imprisonment can apply to persons, including officers of the company, who breach the legislation knowingly or recklessly. Where deliberate exploitation exists the period of imprisonment can be up to 5 years.

Managing these obligations in a large business can be challenging. It is critical that responsible staff ensure stakeholders and line managers are appropriately educated about the obligations and the consequences of failure to comply.


Businesses which have entered into a Sponsorship Agreement with the Department of Immigration have an additional layer of obligations. The Sponsorship Obligations set out a raft of requirements which must be met, tracked, and managed by sponsors.

These obligations are include notifications to the Department of Immigration and Border Protection, obligations to undertake certain activities (such as ensuring that visa holders receive market salary rates, return travel costs are met, and training of Australian employees), as well as record keeping obligations.

Managing these obligations in large businesses can be a challenge, particularly where payroll, training, hiring and other activities occur across separate business silos. Implementing effective systems and processes is critical to managing these obligations.

One important step is to ensure that responsibility for managing the Sponsorship Obligations is centralised within a single business function. It is also advisable that quarterly or bi-annual reviews are conducted to ensure the business is fully compliant with the obligations.


A recent report by the Independent Review Panel to the Federal government recommended a number of changes to simplify the Sponsorship Obligations including changes to Training Benchmarks and Notification Obligations. If accepted these recommendations would simplify compliance for businesses. While it is not certain if any recommendations will be adopted it is clear that Sponsors must maintain an ongoing awareness of changes to the system.


The power of Fairwork Inspectors to check that businesses are abiding by Immigration laws mean that employers are more likely than ever to need to demonstrate they are compliant.

Further, the introduction of the Employer Sanctions Amendments mean that all Australian businesses now have obligations under Immigration law. Failure to abide by these laws can result in serious consequences for the business and associated individuals.

All Australian employers should verify that they are aware of the laws and are complying with the Employer Sanctions laws and any additional Sponsorship Obligations. It is critical that businesses maintain an awareness of these obligations and implement appropriate systems to manage their compliance with these laws.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Jackson Taylor
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