Australia: Bill Proposes Tougher Sanctions for Employers of Unauthorized Foreign Workers
Proposed legislation would impose no-fault civil penalties on businesses that employ unauthorized foreign workers or allow foreign nationals to work in breach of their visa conditions, and would make corporate officers liable for noncompliance. The legislation would also clarify the steps employers must take to verify employment authorization.
A new Australian government proposal would impose no-fault civil penalties on businesses that employ unauthorized foreign workers or allow foreign nationals to work in breach of their visa conditions, and would make corporate officers liable for noncompliance. The legislation would also establish an administrative enforcement procedure and clarify the steps employers must take to verify employment authorization.
The proposed legislation was released for public consultation and is expected to be introduced in Parliament later this year. It follows a 2010 government report that called for an increased effort to deter the hiring of unauthorized foreign workers in order to increase work opportunities for Australian citizens and employment-authorized foreign nationals.
No-Fault Civil Penalty Provisions
Businesses that are found to have employed a foreign national who lacks the appropriate work permission or to have allowed foreign nationals to work in breach of their visa conditions would be subject to fines regardless of whether the business knew or was reckless about verifying the foreign national’s work entitlements. The civil penalties could be as high as AUD $49,500 for a body corporate and AUD $9,900 for an individual employer, individual partners in a partnership or members of an unincorporated association.
New Administrative Enforcement Procedure
The Department of Immigration and Citizenship (DIAC) would be authorized to issue administrative infringement notices to noncompliant employers, as an alternative to pursuing court proceedings against them.
The maximum authorized penalty for an infringement notice would be AUD $1,980 for an individual or AUD $9,900 for a body corporate. An employer that receives an infringement notice would be required to pay the civil penalty, seek an agreement from DIAC to withdraw the notice, or challenge the notice in court, facing the possibility of a higher civil penalty if unsuccessful.
Liability of Individual Corporate Officers
The proposal would extend criminal and civil liability to individual executive officers of a body corporate – specifically directors, CEOs, CFOs or corporate secretaries – if (1) the officer knew the work-related offense would occur or recklessly or negligently disregarded the potential for noncompliance; (2) and the officer was in a position to influence the conduct of the body corporate but failed to take reasonable steps to prevent the violation from being committed or from occurring.
When determining whether an officer failed to take all reasonable steps to prevent a business’s noncompliance, courts would examine what actions the officer took towards ensuring that the business’s employees, agents and contractors knew and understood their obligations to prevent unauthorized work and what actions, if any, the officer took when the officer became aware that the business was failing to comply with the relevant requirements.
The reforms would also extend criminal and civil liability to non-officers who facilitate or are involved in allowing a foreign national to work without sufficient permission, including agents, contractors and those involved in informal labor hire practices, sham contracting, or the use of unauthorized workers by different entities within a conglomerate.
Verification of Employment Authorization
In a positive move for employers, the legislation would introduce statutory defenses for businesses, executives and others who take reasonable steps at the appropriate times to verify a foreign national’s migration status and work permission.
The draft legislation does not mandate a specific verification procedure, though DIAC’s commentary on the draft legislation provides the following examples of what would be considered reasonable steps:
- Verifying employees’ work permission through the Visa Entitlement Verification Online (VEVO) tool prior to or within a few days of a foreign worker’s start date and then reverifying within a few days after the expiration of the foreign worker’s visa;
- Contracting with a third party to verify foreign workers’ migration status and work permission; or
- Having staff view new foreign hires’ original permanent or temporary visa granting permission to work.
If the reforms are implemented, all employers would need to ensure that their systems are compliant with the new requirements to gain the protection of the statutory defense.
Fragomen has submitted recommendations to DIAC in an effort to ensure that any changes provide proper guidance and protections for diligent, compliant employers and do not adversely impact our clients.
This alert is for information purposes only. If you have any questions, please do not hesitate to contact Sasko Markovski, Special Counsel – Compliance and Advisory Practice, or the global immigration professional with whom you work at Fragomen in Australia. Alternatively, please send an email to firstname.lastname@example.org.