457 Visa Training Obligations
Employers who are 457 visa sponsors must comply with the training obligation. This requires the employer to choose which one of the two Training Benchmarks they wish to comply throughout the period of the 457 visa sponsorship. Importantly, this is not a ‘one-off’ obligation - but one that must be meet annually.
Existing Businesses Obligation
Sponsors that have been trading for at least 12 months are required, at application stage, to prove that the business has been providing training to Australian citizens and permanent residents (not temporary visa holders) related to the purpose of the business. The training provided must meet either Benchmark A or Benchmark B.
Involves having allocated funds equivalent to two per cent of payroll in the previous 12 months to an industry training fund to train Australian citizens and permanent residents related to the purpose of the business. There is also a commitment to maintaining expenditure to that level each year for the term of the sponsorship approval.
Involves providing evidence, at application stage, that the business has in the previous 12 months spent the equivalent of one per cent of payroll on training Australian citizen or permanent resident employees of the business in purposes related to the business. The key to this obligation is that the amount spent is expended on formal, structured and independently verifiable training. Expenditure for this purpose can include payment to external providers to deliver relevant training, employment of apprentices and trainees, employment of an internal training provider, paying for a formal course of study for employees or for TAFE or university students or funding a scholarship in a formal course of study approved under the Australian Qualifications Framework.
New Business Obligation
Businesses operating for fewer than 12 months are required to submit an auditable plan detailing planned compliance with either of the Training Benchmarks. Therefore, this must include a forecast of payroll.
How do you calculate your payroll?
Payroll is the total amount a sponsor pays to employees (both Australian workers and workers on a temporary basis). These payments include payments that are defined as “wages” in the payroll tax legislation applicable in the relevant State or Territory such as wages, remuneration, salary, commission payments, bonuses, allowances, superannuation contributions and eligible termination payments. In some States, payments to contractors are included in the payroll figure.
What is an Industry Training Fund?
Industry training funds operate in some, but not all, industries. These bodies provide funding for training of eligible Australian workers in specified industries. In industries in which no industry training funds operate, recognized industry bodies can accept contributions for the purposes of meeting Training Benchmark A. These bodies including many TAFE Colleges, universities including Curtin School of Entrepreneurship, Victoria University and Ballarat University.
Many companies fail to appreciate that meeting a Training Benchmark is an ongoing requirement throughout the period of the sponsorship. So sponsors often inadvertently fail to comply with this obligation by complying on a ‘one-off’ basis – failing to appreciate that this is an ongoing obligation.
Further, some companies are not centralising their training records, making it time-consuming to substantiate compliance with Training Benchmark B, when requested by the Department of Immigration & Citizenship.
Image: Stuart Miles