Sponsoring An Employee in Australia: A Guide for Australian Businesses

Is your business ready to sponsor an employee?

With a historically low unemployment rate in Australia right now, there’s a chance your business is experiencing difficulties regarding workforce shortages. So sponsoring talent from overseas could be the solution.

Australian employers are taking up the opportunities available from sponsoring employees, as a practical and reliable solution to the current talent shortage. But there are complexities.

There are specific requirements and stipulations that need to be met, which are different for each visa type. Issues such as salary requirements, employment conditions, the genuineness of the job openings, and the qualifications of the workers are all contributing factors to sponsor an employee.

Today, we’re going to take you through the various stages of sponsorship you need to be aware of, as well as the types of sponsorship visas to fit your workforce needs.

How to Sponsor an Employee In Australia: Setting the Scene

Firstly, before commencing the sponsorship process, it’s critical that, as an employer, you attain the right advice. This advice must come from The Department of Home Affairs (DHA – previously the Department of Immigration and Border Protection) as there are specific application processing requirements you need to comply with.

Initially, the DHA will require broad issues, such as:

  • Your obligations as the sponsor, in relation to minimum salary and employment conditions
  • Whether the DHA is likely to determine that the nominated occupation is genuine; and
  • Whether the visa applicant is sufficiently qualified for the nominated occupation.

Also, to sponsor an employee, the visa types will need to be considered carefully. There are several visa programs in place to assist Australian employers to meet skill shortages. The  Temporary Shortage Skill (TSS) Subclass 482 visa is the most commonly used. This visa replaced the once ubiquitous ‘457 visa’, in 2018.

And in undertaking the requirements to sponsor an employee, you can either sponsor workers directly from overseas, so new professionals willing to migrate to Australia. Or you can sponsor non-Australians already living, working, studying in, or visiting Australia who are on a different type of visa.

The other factor to consider when setting the scene to sponsor an employee is this: whether you sponsor an employee on a temporary or a permanent basis. Initially, you may wish to sponsor worker/s on a temporary basis, then shift to a permanent basis. This of course, will depend on the role they’re performing.

how to sponsor an employee

Becoming an Approved Standard Business Sponsor

Your organisation will need to undertake a Standard Business Sponsorship application. This ensures that your business is operating lawfully in Australia; that it’s an Australian registered business; or that it’s an overseas business actively trading in Australia.

Also, overseas businesses that are not operating a business in Australia can sponsor an employee to work here, but only if the purpose of the employee working here is to:

  1. a) Assist in establishing a business operation in Australia for the employer; or
    b) Assist in fulfilling, a contractual obligation of the employer.

All of the above factors can be substantiated with the DHA by providing them with company registration certificates, company bank statements, company tax returns and business activity statements.

When applying to become an approved standard business sponsor, other stipulations apply. These include:

  • Your business needs to prove that you have a strong record of or commitment to employing local labour
  • Your business has non-discriminatory employment practices in place
  • Your business has no adverse information recorded against it or anyone related to your business

How to Sponsor an Employee: ThE TEMPORARY SHORTAGE SKILL (TSS) Subclass 482 visa

The TSS visa allows highly skilled workers to come to Australia to work for an approved employer for either two or four years.

The length of the visa depends on the nominated occupation. And the nominated occupation must be on one of two lists issued by the DHA:

  • The Short-Term Skilled Occupation List (STSOL); or
  • The Medium- and Long-Term Strategic Skills List (MLTSSL).

Visas for occupations on the STSOL list may be issued for either one or two years, whereas visas for occupations on MLTSSL can obtain visas for up to four years.

As stated above, to nominate a skilled worker for a TSS visa, you as the prospective employer must first apply to become a standard business sponsor.

The Nomination Process

Once you’re approved as a standard business sponsor, you then need to lodge a nomination application for the position to be filled. In addition to the position being on one of the above lists (the STSOL or the MLTSSL), the DHA will also need to see that your business has met the following criteria:

  1. Market Salary:

You need to show that the market salary for the worker is at least the amount stated on the Temporary Skilled Migration Income Threshold (TSMIT) (currently 53,900pa (as of 1 July 2018) base salary excluding superannuation).

  1. Genuine Position:

The DHA needs to be satisfied that the nominated position is a genuine one, in relation to the size and organisational structure of the business. It needs to be clear to the DHA that the proposed applicant will fit into the business and the role. Also, it needs to be evident that the applicant is currently in Australia and whether they have previously applied for various visas to try to stay in Australia.

  1. Labour Market Testing:

The DHA also needs to be satisfied that your company has tried to fill the nominated position with an Australian citizen or permanent resident. Some countries and occupations may be exempt from labour market testing.

  1. The Skilled Australia Fund:

The DHA also requires standard business sponsors to support Australian workers by contributing to the Skilled Australia Fund (SAF). The SAF levy is dependent on the proposed length of the visa, and on the company’s turnover. The formula is Base amount x visa period, where the base amount is $1,200 if the annual turnover is less than AU$10,000,000, or in any other case, $1,800. It’s important to note that the SAF levy is non-refundable, even if the nomination application is unsuccessful.

The Visa Process

Upon receiving approval for the nominated position, the next step is to lodge the visa application. The applicant for the TSS visa needs to meet the following criteria:

  • They have an English language proficiency equivalent to an International English Language Testing System (IELTS)test score of at least 4.5 in each of speaking, reading, writing and listening, with an overall score of at least 5;
  • They have proof that they possess the skills for the occupation. This might involve the applicant completing a skills assessment test;
  • The applicant and any migrating family members meet character and health requirements; and
  • The applicant will maintain private health insurance while they’re in Australia.

sponsoring an employee in Australia

How to Sponsor an Employee: The Employer Nomination Scheme (ENS) Subclass 186 Visa

The Employer Nomination Scheme (subclass 186) visa is for skilled workers that have been nominated for a permanent position in an eligible occupation in Australia (via the DE Stream – see below).
There are three streams of the ENS, Subclass 186 Visa. These are:

  1. The Temporary Residence Transition (TRT) Stream:

The Temporary Residence Transition (TRT) stream is for subclass 457/TSS visa holders who have worked with their employer under a 457/TSS Visa for a minimum of two or three years (depending on the circumstances) and has been offered permanent employment by their employer.

  1. The Direct Entry Stream:

The Direct Entry visa stream enables applicants in certain occupations to be sponsored directly for permanent residency. Applicants must have at least three years of work experience, have a positive skills assessment, possess competent English skills, and be nominated for an eligible occupation.

  1. The Agreement Stream:

The Labour Agreement Stream is for skilled workers sponsored by an organisation that is a party to a negotiated Labour Agreement with the Australian government.

Under the TRT stream above (similar to the TSS visa application protocols), the nominated worker must comply with the following:

  • They must be under the age of 45 years at the time of application;
  • They must provide evidence of an IELTS score, or equivalent, of at least 6 in each of listening, reading, writing and speaking (or have completed 5 years full-time secondary or tertiary education in English);
  • They must hold any required occupational licence, registration or membership at the time of the application; and
  • Together with any migrating family members, satisfy mandatory character and health requirements.

The 186 visa is also a common pathway (via the TRT stream) for 457/TSS visa holders who have the ability to transition to permanent residency after two or three years with their nominated employer.

Only occupations that are listed on the Medium and Long-term Strategic Skills List (MLTSSL) are eligible for sponsorship via the Employer Nomination Scheme (subclass 186) via the Direct Entry pathway.

And Finally…

To sponsor an employee from overseas, it’s crucial that you have the appropriate employment contract in place before the worker commences with your business. Ideally, engage an employment lawyer to ensure you’ve not omitted any important requirements both in the visa application process and the crafting of the employment contract.

This process may seem laborious and time intensive. It can be. But the benefits to your business will be immense. Outside of meeting the skills shortages in your business, you’ll also have:

  • Access to new ideas and new ways of conducting your business
  • Cultural diversity benefits for your business
  • A better understanding of global market talent sources

It’s an all-around win-win.


Also, please do contact us if you have any feedback or comments.

As one of the world’s leading providers of contingent worker management solutionsCXC is well-positioned to optimise all elements of your contingent workforce strategy.

With operations in more than 50 countries across five continents and decades of experience, we can assist with every aspect of your program.

If you’re looking to sponsor an employee for your organisation, please don’t hesitate to contact us.