Author: Yen Wong – Team Lead / Senior Immigration Lawyer
Employer sponsorship is a key pathway for Australian businesses to fill critical skill shortages by engaging overseas workers. However, if a business fails to meet its sponsorship obligations, the Department of Home Affairs may sanction or bar its sponsorship approval. These actions can significantly disrupt business operations and place sponsored employees at risk of losing their visa status.
Reasons a sponsorship may be barred or cancelled
The Department of Home Affairs may take action against an approved sponsor if there is evidence of non-compliance with sponsorship obligations. Depending on the circumstances, this may result in a sponsorship bar (of a certain period) or permanent cancellation of the sponsorship facility. The Department may also impose fines or penalties, request an enforceable undertaking, or issue infringement notices depending on the breach of the obligation.
Sponsorship bar or sanctions
If the sponsor is barred or sanctioned, this may be over a prescribed period. During this time, the sponsor cannot sponsor new workers, but existing sponsored workers may continue to work for the sponsor. Where the breach is serious, the business may be subject to permanent cancellation of sponsorship approval which may result in the sponsor being barred from nominating workers.
Common reasons for sanctions or bars arise because of a breach of sponsorship obligations, such as:
- Failure to provide requested records or information: the sponsor does not submit documents when requested
- Approved work in nominated occupation: the sponsor has been employing the worker in an occupation that is not aligned with their nominated role
- Remuneration: the sponsor has been underpaying their foreign workers in accordance with the market salary rates or the declared salary on their nomination application
- Provision of false or misleading information to the Department: the sponsor submits inaccurate job descriptions and inflated salary details to gain nomination approval.
- Business insolvency or ceasing to operate: the sponsor enters voluntary administration and ceases operations without notifying the Department.
- Discriminatory recruitment practices: an audit reveals the sponsor excluded Australian applicants in advertising, favouring visa holders.
- Other Adverse Information: this may not necessarily be immigration related. Businesses can be bar or sanctioned if they have been found by a court or competent authority to have contravened a Commonwealth, state or territory law
- Failure to notify the Department of required changes within 28 calendar days: the sponsor does not report a sponsored worker’s resignation, breaching notification obligations and leading to cancellation.
If it is a civil contravention or offence, the Australian Border Force may:
- issue an infringement notice of up to AUD 15,840 for individuals and AUD 79,200 for bodies corporate per obligation breach
- apply to a court for a civil penalty order of up to AUD 396,000 for a corporation and AUD 76,200 for an individual for each failure.
What employers should do
If your business receives a notice or request for information under a monitoring or audit exercise by the Department of Home Affairs, it’s essential to act quickly before it leads to an outcome of bar or sanction, if the Department finds that the business has breached a sponsorship obligation.
- Understand the reason: Carefully review the notice from the Department to identify which obligations or breaches triggered the action.
- Comply with instructions: follow all timelines and directions, such as providing employment records or responding to concerns.
- Seek professional advice: consult lawyers or agents to guide your next steps.
- Notify sponsored employees: Inform your sponsored workers as early as possible. Explain the situation clearly and encourage them to seek migration advice.
- Address compliance issues: take corrective steps, such as adjusting employment conditions, paying outstanding wages, or updating HR systems.
- Communicate with the Department: Maintain professional, open communication with the Department throughout the process. Demonstrating good faith may support any future applications.
- Consider appeal or reinstatement: If the decision seems incorrect or premature, you may provide additional evidence, request reinstatement (in the case of suspension), or pursue legal review.
- Plan for operational impacts: if your sponsorship is revoked, review workforce plans, explore visa options for key staff, and prepare to reapply when eligible.
Implications for visa holders
If your employer’s sponsorship is under review or eventually barred or sanctioned, your visa is not automatically cancelled, but it may be affected. Taking early action is key:
- Stay calm and informed: sponsorship bars do not cancel your existing visa. You can usually continue working unless advised otherwise. Cancellations may affect your visa depending on the situation.
- Get professional advice: get tailored advice early to protect your visa status.
- Understand your visa conditions: your visa is tied to your employer. If they lose their sponsorship approval, you must take action to avoid breaching visa terms.
- Act quickly: you may have limited time (e.g. 180 days) to find a new sponsor, apply for another visa, or leave Australia.
- Transfer to a new sponsor: if eligible, you can be nominated by another approved employer. This may involve a new visa application.
- Consider other visa options: depending on your circumstances, consider skilled, partner, student, or visitor visa pathways.
- Stay compliant: continue meeting all visa conditions during any transition period.
How to avoid sponsorship sanctions
As a migration law firm, Absolute Immigration Legal works closely with businesses to help them meet their sponsorship obligations and reduce the risk of facing sanctions by the Department of Home Affairs. In addition to understanding legal obligations, it’s important to establish proactive internal systems. Here’s what we advise to maintain your sponsorship status:
- Review your obligations regularly: stay informed of all sponsor responsibilities, including hiring for the nominated occupation, paying correct wages, keeping records, and notifying the Department of changes. Some obligations continue for two years after your sponsorship ends.
- Notify the Department of any changes within 28 calendar days: you must report changes such as
- A sponsored employee resigning, not starting work, or changing duties
- Changes to business structure, ownership, trading name, or contact details
- Insolvency, administration, or business closure
- Ensure your sponsored employees work only in their nominated occupation: if their duties or role change, you must lodge a new nomination. In some cases, a new visa application is also required.
- Provide equivalent pay and conditions: ensure the sponsored worker receives:
- At least the nominated salary
- Pay and conditions must match those of Australian workers, unless the sponsored employee earns over $250,000 annually.
- Keep accurate and accessible records: you must maintain records such as
- employment contracts, pay slips, non-monetary benefits
- job descriptions, work location, leave entitlements, and salary reviews records must be reproducible and accessible to authorities.
- Cooperate with audits and inspectors: allow access to premises, provide documentation promptly, and cooperate fully with Departmental or Fair Work inspectors.
- Cover all sponsorship-related costs: you must not pass on costs such as sponsorship or nomination fees, recruitment expenses, or migration representative charges to the employee.
- Seek migration advice before major changes: consult before restructuring, insolvency, or closure.
- Avoid unauthorised on-hire arrangements: do not place visa holders in other businesses unless legally allowed.
How Absolute Immigration Legal can support your business
At Absolute Immigration Legal, we partner with businesses to deliver strategic immigration solutions that support workforce growth and compliance. If you are sponsoring workers from overseas or need assistance navigating sponsorship obligations, our team can guide you through visa management, skilled migration strategies, and compliance with Australian Government requirements.
Contact our Lawyers at admin@absoluteimmigrationlegal.com to learn how we can help you maintain your sponsorship status and support your workforce needs.