As an employer, it is imperative that you know whether your employees have the right to work in Australia.

The government has estimated that there are up to 62,000 people in Australia without visas, and up to 100,000 people working illegally - either without a valid visa or working when they don’t have work rights!

An illegal worker is a non-citizen who is working without a valid visa or working in breach of their visa conditions. 

Not everyone who comes to Australia on a visa has permission to work and, for a variety of reasons, not every visa holder is aware of their visa expiry date.

In addition, some people may have had their visas cancelled and they may be totally oblivious to the fact that this has happened - again, for a variety of reasons.

Not all visas provide “permission to work”

There are many visas which do not provide permission to work. Some visas (such as bridging visas) may or may not allow the visa holder to work, depending upon the type of visa the applicant held before their current visa grant. 

It is therefore imperative that each employee’s visa status is checked to determine whether or not they are entitled to work, and if so whether they are entitled to work full-time or part-time, and what the expiry date of the visa is.

Employers are responsible for employing legal workers. 

FYI : Work includes both paid and unpaid work. 

The Department of Home Affairs considers “work” to be any activity that normally attracts remuneration.

Employers face significant criminal and civil penalties for allowing illegal workers to work, whether or not the employer is aware that a worker is working illegally - i.e., without a valid visa, with a valid visa which has no permission to work, or contrary to the valid visa’s work conditions.

“Allow to work” defined

The relevant immigration legislation defines “allow to work”, very broadly, e.g.,:

The first person participates in an arrangement, or any arrangement included in a series of arrangements, for the performance of work by the second person for the first person or another participant in the arrangement or any such arrangement

This definition allows almost any “arrangement” to be deemed as employment.

Allowing a person to work unlawfully also renders anyone who participates in an arrangement that results in a person working unlawfully to be liable. This could include parties other than a direct employer (e.g., labour hire operators, recruitment consultants). 

“Accessorial liability” provisions in the legislation also mean that executive officers, directors, other managers, HR officers and even company accountants can also be found to be involved where workers are found to be working unlawfully in contravention of the Migration Regulations and Migration Act. 

To be involved in the contravention, a person must have intentionally participated in the contravention, which requires actual knowledge of the contravention. It may also be possible to infer actual knowledge through “wilful blindness” to the contravention at the time to contravention occurred.

Penalties for employer breaches of employee visa conditions

Unless employers can prove that they have taken reasonable steps to verify that their employee had permission to work in the role offered, employers can potentially face fines under the civil penalty rules of over $90,000 for each breach. 

A “No fault” approach is taken by the Department of Home Affairs

No, this is not a good thing!

Under the civil penalty rules, the Department of Home Affairs (DHA) need not prove that the employer (or a person deemed to be liable by way of being an "accessory" - see above) knew the worker’s visa status, or was reckless with respect to their employees’ visa status (i.e. behaviour which can attract criminal penalties). 

Employers are assumed to be guilty of a civil breach unless they can show that they followed the appropriate visa verification procedures (VEVO). This means that penalties will apply even if the employer did not know they were employing illegal workers.

The DHA can also issue infringement notices independently to employers without the need to apply to a court to impose a penalty. 

Civil breaches include:

• Allowing a person who does not have a visa to work. 
• Allowing a person who has a “no work” condition on their visa to work.
• Allowing a worker to work more hours that they are allowed to in breach of their visa work restrictions. For example, student visa holders are usually only allowed to work 40 hours per fortnight during course times, although currently, under Covid concessions, they can work full time .
• Referring a person who does not have a visa, or who has a “no work” condition” on their visa, which means that e.g., recruitment consultants may contravene the legislation if they refer a person who does not have work rights.
• An employer’s participation in any arrangement where an illegal worker is allowed to work. This means that an employer may be caught out if they allow even a subcontractor (i.e., a person who is not an employee) to work unlawfully.
  

There are a wide range of monetary penalties that can be applied to employers who engage illegal workers, or engage workers in breach of their work conditions.

The maximum civil penalty (per illegal worker) is:

• $18,900 for an individual (e.g. a sole trader); or
• $94,500 for a body corporate (e.g. a company).

Criminal sanctions

Where employers have recklessly or knowingly employed illegal workers, the criminal penalties are as follows:

Primary offences (per illegal worker):

• $25,200 and/or two years imprisonment for an individual (e.g. a sole trader); or
• $126,000 for a body corporate (e.g. a company).

Aggravated offences (per illegal worker):

• $63,000 and up to five years imprisonment for an individual; or
• $315,000 for a body corporate (e.g. a company).

Civil and criminal penalties can be concurrently applied to breaches in any case, and in some cases an employer may face civil/criminal penalties under the Fair Work Act as well for breaches of employment law.

Conclusion: The possible actions of the DHA and penalties that may apply to employers engaging overseas workers illegally.

How do employers defend themselves against sanctions?

The onus of proof rests with the employer to demonstrate that they took “reasonable steps” to ensure they did not employ illegal workers, by verifying their visa status.

Acceptable visa verification procedures

The DHA regards appropriate visa verification procedures as follows:

• using third-party contractors to verify a workers’ visa conditions;
• establishing that an employee is an Australian or New Zealand citizen; and
• using the department’s VEVO service.

Hiring employees from labour hire companies

Employers remain responsible for hiring legal workers even when sourcing employees from labour hire contractors. 

Employers may overcome this hurdle by including a clause in the contract to the extent that the supply of labour will only include legal workers, which then shifts the liability back onto the labour hire supplier.

Pro Tip: 

Sighting an employee’s visa grant letter is not sufficient, as the visa may have expired or been cancelled, or have been superseded by another visa type, with different work conditions. 

We also do not recommend allowing employees to provide “evidence” of checking their own visa status, for obvious reasons.

It’s not just about the criminal or civil sanctions either!

If any of the civil or criminal sanction discussed above are applied to an employer, it will result in “adverse information” being held against the employer.

If the employer is an approved business sponsor, “adverse information” may result in the sponsor being barred from sponsoring further workers, or having their sponsorship cancelled. If the sponsorship is cancelled, all visas associated with the sponsorship will be canceled.

Such an employer may also be precluded from nominating their existing workers for permanent residence by the Department of Home Affairs.

Maggie Taaffe | Lorg Talent

We are a leading provider of international recruitment and migration solutions for Australian employers. With our extensive global network, we can connect you with the best talent from around the world.