The 5 most common myths and truths about becoming a sponsor

There are many misunderstandings and fears among businesses regarding sponsoring skilled overseas workers in Australia. What are the “conspiracy theories” and “real science” in sponsorship?

“Too expensive; too risky; worthless; private documents need to be made public; only benefits the worker but not the company” … the list goes on of what businesses have heard when it comes to sponsoring skilled foreign workers, especially for business owners considering sponsoring skilled migrants for the first time.

We spoke to Ana Letícia Correia-Gnavi, Corporate Services Coordinator and Senior Registered Migration Consultant at Seven Corp, about the main concerns businesses may have when becoming a sponsor, and she listed the five most common myths and truths about the process.

The Myths vs The Truths

1. The Myth: The business is too small to sponsor someone

Truth: While larger companies may have more resources, any company operating legally in Australia, regardless of size, can become a sponsor, provided they meet the eligibility and financial requirements, and can demonstrate the size and scope of their operations would warrant a genuine position.

2. The Myth: The company must have a defined annual turnover 

Truth: Companies do not need to have a specific minimum annual turnover to become a sponsor. However, they must provide their financial metrics, legitimacy, and active operation. This should then demonstrate the company can viably pay the nominee’s salary, maintain business operations, and fulfil sponsorship obligations (such as training and record-keeping). Small businesses and startups can become sponsors by providing evidence of their activity through lease agreements, contracts, and invoices.

3. The Myth: Sponsoring is very expensive and too complicated

Truth: Yes. There is a cost involved in becoming a sponsor and sponsoring international skilled workers. However, the calculation must consider the benefits of hiring a qualified professional to meet the company's needs and how much the company will lose if this is not done. The cost can start at AUD 3,000 plus a consultancy’s fees, but the amounts vary depending on the visa required and the professional services.

As for the complexity of the process, it is necessary to pay close attention to each stage of the sponsorship. However, since the company becomes a Standard Business Sponsor for the first person or group of new employees, subsequent processes are further simplified. The best recommendation is to rely on immigration professionals to support the company and facilitate the process.

4. The Myth: Business can sponsor for any occupation

Truth: No. Even after becoming a Standard Business Sponsor, not all types of occupations can go through the sponsorship process. It must appear on the official skilled occupation lists relevant to the visa subclass being used as Skills in Demand (SID - Subclass 482) visa, Employer Nomination Scheme (ENS - Subclass 186), Skilled Employer Sponsored Regional (Subclass 494), or even Training Visa (Subclass 407) and National Innovation Visa (Subclass 858). Labour agreements may also be considered in accessing a variety of concessions to allow for certain additional occupations.

5. The Myth: Business must prove no Australians can do the job

Truth: it is not an absolute truth, and business does not need to prove that “no Australian” can do the job, but it is necessary to conduct a Labour Market Testing (LMT), by advertising the job in the authorized platform for minimum 28 days, and show a genuine attempt to hire locally.

In addition, hiring international workers does not mean paying them differently from national workers. Employees earning an annual salary of less than AUD250,000 must show that the worker meets the new salary standard aligned with the Annual Market Salary Rate (AMSR), which is to be determined by the relevant legislative instrument.

Ana Letícia also highlights that some of the most common fears that businesses may have when thinking of sponsoring an international employee are the fear of being rejected and wasting the money invested in the sponsorship process, or that the employee will leave them after the visa is granted.

“The truth is that there are costs involved that cannot be passed on to the visa applicant themselves and that the business will have obligations to fulfil as a sponsor,” says Mrs Correia-Gnavi.

There are protections and obligations for both the employer and the employee. For first-time sponsors, considering that Home Affairs does not reimburse the investment of the refusal request, you can hire the worker on a temporary contract, while you process the sponsorship and consolidate the contribution of the skilled worker to the business.

Having the process supported by a professional immigration agent is also a step towards reducing risks and increasing security.

If you have any further questions about your obligations as a standard business sponsor, do not hesitate to contact a Seven Corp specialist for a free consultation.

Email: employer@sevencorp.com.au

Phone number: 1300 157 707