New ‘Payment for Visa’ Laws Increase Liability for CEOs, CFOs, & Company Directors

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New ‘Charging for a Migration Outcome’ laws have been introduced to prevent abuse of the work visa system by creating criminal and civil penalties for persons seeking to give or receive an improper benefit in return for visa sponsorship.

While the vast majority of Australian businesses who use the sponsored visa system will already comply with the legislation the new law places an onus on businesses to take steps to ensure staff and agents of the business understand and act in accordance with the laws. Failure to do so can result in significant penalties for the business and its officers.

The legislation is a timely reminder of the importance for businesses to implement effective systems and processes to control the organisation’s visa sponsorship program.

What has changed?

The Migration Amendment (Charging for a Migration Outcome) Act 2015 came into force on 30 November 2015, making it illegal for a person to receive a ‘benefit’ in exchange for a ‘migration outcome’. The laws are intended to prevent unscrupulous businesses and individuals from benefiting through exploitation of the sponsored work visa system. The laws are also designed to prevent people seeking sponsorship, or third parties, from offering financial or other gain to employers in exchange for being sponsored on the basis that such action undermines the legitimacy of the Australian immigration system and may impact the local job market.

These powers are supplemented by new investigative powers and the ability to cancel visas where the Department of Home Affairs find a benefit was asked for, received, offered, or provided in exchange for a migration outcome.

What is prohibited?

Broadly, any behaviour which amounts to making or receiving a benefit for a migration outcome is prohibited. ‘Benefit’ and ‘migration outcome’ are both defined broadly: benefit can include a payment, a deduction, property, an advantage, service, or a gift. Migration outcome includes almost any sponsorship event such as applying for or extending a Business Sponsorship or Labour Agreement, making or not withdrawing a nomination for a person, employing or not terminating a person sponsored on a visa, or the grant of a sponsored visa. Making arrangements for a family member of a sponsored visa holder is likewise prohibited.

The laws also criminalise offering or requesting a migration outcome in exchange for a benefit even where the event does not occur.

What visas are included?

All sponsored visas. This includes the temporary Subclass 457 Temporary Work (Skilled) visa, Subclass 401 (Temporary Work (Long Stay activity), Subclass 402 (Training and Research), Subclass 420 (Entertainment), the permanent Subclass 186 Employer Nomination Scheme and Subclass 187 Regional Skilled Migration Scheme visas.

Who is covered?

Anyone who requests or receives a benefit from a migration outcome is captured by the criminal and civil regime. The legislation is framed widely to capture not only the parties to the employment relationship but any person acting as an agent who receives a benefit. Penalties are significant. For a party found to have requested or received a benefit this can include fines of up to $64,800 for individuals, $324,000 for a body corporate, or up to 2 years’ imprisonment for criminal offences.

A separate civil penalty regime also applies to a prospective visa applicant or their agent offering or providing a benefit in exchange for a migration outcome. Parties who are found to have contravened the civil penalty provisions are liable for up to $43,200 for individuals or $216,000 for a body corporate.

Exemptions apply for migration agents, recruitment consultants and other professional service providers legitimately engaged in an exchange of services related to the sponsorship.

The laws have extraterritorial application in a number of instances and apply to Australian citizens and permanent residents, or Australian entities, acting outside Australia.

What liability exists for business?

Civil and criminal liability exist for businesses and executive officers where they knew of, or were reckless or negligent as to whether, payment for visa activity occurred, were in a position to influence the business’s activities and failed to take all reasonable steps to prevent such activity.

Liability extends to directors, CEOs, CFOs and company secretaries where the body corporate commits that contravention.

Businesses must take action to ensure that they are complying with the laws and that staff, contractors and agents, are aware of their obligations. Should the business become aware of a contravention it is critical that action be taken immediately to prevent the activity occurring.

New investigative powers

To enforce the new legislation the Department will exercise new investigative powers to investigate potential wrongdoing. Existing investigative powers have been expanded to enable collection of evidence which demonstrates that payment for visa activity has occurred.

Summary

Businesses should be aware that new criminal and civil penalties have been introduced to prevent persons offering or receiving a benefit in exchange for a wide range of work visa sponsorship activities. Liability extends beyond the business entity to a range of individuals within the business including directors, CEOs, CFOs and company secretaries. To limit liability businesses should take appropriate action to ensure employees, agents and contractors of the business understand and comply with the new laws and to review their governance and oversight of visa sponsorship.

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