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The Rise And Rise Of Immigration Compliance

Immigration compliance

Corporate compliance is often front of mind for in-house counsel. But immigration compliance is an area that still does not receive due recognition in many organisations. This is despite the fact that the legal consequences of non-compliance are serious for organisations and reputational impacts can be just as damaging.

Corporate compliance and risk mitigation are front of mind for in-house counsel. Ensuring that the organisation can meet operational goals, while ticking regulatory checkboxes, without the negative consequences of government sanctions or reputational harm, is central to fulfilling the function. Compliance with occupational health and safety, terrorism and money laundering, workplace harassment, and discrimination regimes all feature heavily among the areas of concern for diligent counsel. But immigration compliance remains something of a sleeper for many Australian businesses. Do we know about it? Somewhat. Have we got a policy? Maybe. What are we doing about it? Not sure.

Two decades of labour market transformation

One of the reasons immigration compliance has been a second-tier, or even a third-tier concern, for many organisations is historic. Until the last 20 or so years, Australia was largely a settler society, with the vast majority of people arriving as permanent residents. Issues relating to the employment of temporary migrants were not therefore particularly pressing.

However, Australian society, and the local workforce, has dramatically transformed in this time. It is estimated that more than one million non- citizens are residing in Australia at any one time on some form of temporary visa. In the workforce, it is estimated that more than 1 in 20 is a temporary migrant. The phenomenon of temporary migration has reshaped the demographics of Australian society and created a profound shift in the way businesses need to address the visa status of employees.

The amalgamation of the Australian Department of Citizenship into the Australian Border Force in July 2015 (both now exist under the ‘Home Affairs’ super portfolio) signalled a change in government approach to migration. Gone was the focus on migrants’ role in ‘nation building’; immigration policy has become increasingly punitive, focussing on identifying security risks, enforcement, Visa cancellation, and deportation. This change in focus has been demonstrated by a number of policy shifts, such as the rapid increase in character cancellations and deportations but also the Turnbull government’s abolition of the longstanding Subclass 457 Work Visa in favour of a trimmed-down and less generous Temporary Skill Shortage Subclass 482 Visa program.

The immigration compliance regime

The current regulatory regime consists of three major areas of responsibility – ensuring employees have a valid visa, preventing organisations or individuals from improperly benefitting from the sponsorship system, and the Sponsorship Obligations that accompany the employer-sponsored visa programs, such as the TSS 482 Visa.

All Australian employers must take steps to ensure that new hires hold a valid visa that permits them to work and that the employment offered is consistent with these work rights. This extends to contractors and other non-permanent staff, such as those engaged through labour hire. A second limb of this requirement is that organisations must ensure that all existing employees who hold temporary visas retain the right to work, through ongoing visa checks across the employee lifecycle.

A lesser-known element of this requirement is the obligation to ensure all existing employees are citizens, permanent residents, or have a  valid temporary visa with suitable work rights. This requirement can be confronting for organisations that find it disturbing to request evidence of status from longstanding employees; however, the regulations are clear and liability rests with the employer to verify employees’ status.

The second set of regulatory prohibitions, referred to as the ‘Charging for a Migration Outcome’ provisions, requires organisations to ensure that there  is no quid pro quo for visa sponsorship. The organisation, and its employees, must not ask for or receive any benefit in exchange for any employment outcome related to a visa. These provisions criminalise abuse of the visa sponsorship system whereby parties might improperly benefit from offering or obtaining a visa.

This is a strict liability offence and requires the organisation and its executive officers to take ‘reasonable steps’ to ensure that the organisation and its employees do not breach these laws. Penalties are both civil and criminal, and executive officers can be prosecuted where they have failed to take all reasonable steps to prevent the breaches.

Finally, organisations that access skilled labour through a sponsorship agreement with the Department of Home Affairs, such as the Business Sponsorship program for the TSS 482 Visa, have a suite of obligations relating to their role as sponsors. These include record keeping, notifications of certain events, ensuring sponsored staff receive market salary rates for the duration of their visa, and paying return travel costs to visa holders who wish to return home.

Breaches of the Sponsorship Obligations can result in cancellation of the sponsorship, which prevents further use of the sponsored visas, as well as bars future use of the visa program. For many multinational organisations the loss of access to global mobility and intracompany transfers could be devastating.

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Risks of reputational damage

Beyond the immediate impact of civil and criminal penalties, the reputational harm of non-compliance with immigration laws can be profound. The Regulations now provide for publication on the department’s website of the names of sponsors who have been found in breach of their obligations. Serious breaches can easily become public and cause major harm to an organisation’s brand.

Over the last decade there have been numerous examples of major organisations that have received unfavourable media and political attention for their failure to adhere to immigration obligations. The 2015 7-Eleven scandal demonstrated that immigration was not just sensitive but a potential powder keg. Dozens, if not hundreds, of articles were penned on the topic, and the story featured heavily in high-profile national current affairs programs. While the cost of the regulatory response is unknown, it is estimated that the business paid out $150 million in wages alone. And though the legal and financial fallout was clearly costly, the long-term brand damage to the business was very possibly greater.

Knowing is half the battle

The fact that there is a clear obligation on the business to ensure all staff have the right to work and understand the prohibition on benefitting from a sponsorship event is sufficient for in-house counsel to develop a business case to obtain buy-in from business stakeholders. An initial risk assessment, combined with frank advice to the executive on the civil and criminal risks to the organisation and themselves, is likely to generate support for rapid remedial action where required.

When used appropriately, immigration can greatly support an organisation’s strategic goals — it is important not to lose sight of the benefits that the visa system can bring through access to high-level or proprietary knowledge and skills unavailable in the local market. It may be necessary to conduct a review of current usage and potential future usage to understand the appropriate triggers for when visas should be used to meet strategic goals.

Once the in-house team has approval, there is need to map the regulatory requirements, assign responsibility, develop a policy, and provide oversight on compliance with a due diligence framework. A well-developed, flexible immigration policy can deliver significant benefits for organisations. The policy can support operational goals as well as mitigate organisational risk through appropriate compliance systems. Policies should be responsive and subject to review, preferably as immigration programs and internal requirements change. Policies should be supported by internal, and potentially external, audits of both visa-holder populations as well as the policy itself.

In most local organisations, responsibility for immigration sits with Human Resources, with the legal team potentially providing oversight and support. It is important that in-house counsel remain across the policy and that there be ongoing communication between responsible teams, in particular if the organisation accesses immigration services directly rather than through external services. It is also important to remember that immigration obligations are likely to be cross functional and may involve amending procurement, supply-chain and labour-hire agreements to ensure the business and suppliers are compliant.

If the business is a volume immigration user, establishing a separate team may be appropriate, but appointing internal subject matter experts and investing in regular staff training will be critical. Given that processes, policy and timeframes change so frequently, responsible staff should assist by engaging with policy updates and trends, potentially by reading content prepared by immigration providers. Ensuring that the responsible internal teams are sufficiently resourced and have a direct line of communications to escalate complex matters, internally or externally, is crucial.

Obtaining high-quality external advice and assistance can be of great benefit. One of the biggest challenges of Australian immigration law is the constant change to law and policy. Engaging professional immigration lawyers and registered migration agents can save the organisation from reinventing the wheel and bring a depth of practical and policy experience not available internally.

Quality immigration providers will assist in managing visa case work on behalf of the organisation as well as provide training and compliance support, act as a guide to identifying risk, and support the business to optimise strategies for securing business-critical resources.

Conclusion

Immigration legal obligations pose a real risk for many Australian organisations. Despite this, many organisations are not across all aspects of the law and have under-developed policies to deal with compliance.

Given the seriousness of the legal, financial, and reputational consequences of non-compliance, it is no longer acceptable for organisations to delay addressing these legal obligations. The shift to naming and shaming organisations that fail to meet their obligations and the existence of personal penalties for the executive and board members demonstrate how serious these issues are being treated by government.

All Australian organisations need to take proactive steps to ensure compliance. Awareness of the obligations is the first step. Given the presence of more than one million temporary residents in Australia, it is increasingly unlikely that organisations can limit exposure to visa holders completely. Risk can, however, be mitigated through a systematic and structured approach involving effective policies and processes, allocation of responsibilities, training, and oversight.

While an organisation’s interaction with the immigration system poses risk,  it is also a powerful potential benefit. For multinational organisations, the need to participate in the global business with offices around the world is non-negotiable. For local businesses, it is increasingly obvious that almost all organisations are competing globally. For the businesses that aren’t, they are still trying to access global skills to get the edge on local competition.

Access to visas is increasingly important for Australian organisations but compliance with the legal system requires organisational commitment and resources. The risks incurred by failing to meet these obligations include regulatory action and the potential for serious reputational harm. Businesses would be well served by taking a proactive approach to this increasingly significant field of regulation.

This article was written for the Australian Corporate Lawyer Magazine – Summer Edition 2019.

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