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The changes to the 457 Visa, now known as the Temporary Skill Shortage (TSS) Visa, can be difficult to wrap your mind around. While there has been a flood of information about the visa changes, there is one area that has flown under the radar – On-Hire Labour Agreements.
A company that holds an On-Hire Labour Agreement is able to sponsor skilled workers in occupations which are on the relevant lists, and then on-hire them to a third party company who was unable to sponsor the skilled worker direct. This means companies are allowed to become the surrogate sponsor on behalf of the company they are contracting the individual into.
In the coming months, business who are confused with all the changes to the 457/TSS Visa should consider using an On-Hire Labour Agreement Company to make their life easier. With the developing preference for a gig economy, otherwise known as a contingent workforce, this option is becoming increasingly favourable.
On-Hire Labour Agreements are set up for three years with the Department of Immigration and Border Protection (DIBP). They have their own rules of engagement which usually last for the length of the agreement.
At the moment, not all of the ‘new’ visa rules are impacting upon the On-Hire Agreements. As a result, there are a few things which are different, meaning it may be more beneficial to use an On-Hire Labour Agreement Company, rather than looking at the Direct Sponsorship route.
A contract is established between the On-Hire Labour Agreement Company, the company they are on-hiring to (the client) and the skilled worker (the contractor).
The established contract can take a number of forms. It may establish the contractor with a daily rate, or possibly a fixed salary with holidays and sick leave. However, there will be a minimum net salary that will have to be negotiated and met, in order to ensure that the skilled worker is meeting the conditions of their visa.
There are a number of companies, who under the new regulations, are unable to directly sponsor a skilled worker. For instance, if your company does not have an annual turnover of more than one million dollars, or your company has less than five staff members you will be unable to sponsor. However, you can still take advantage of the experience and skills of skilled migrants through an On-Hire Labour Agreement Company.
Minimum salary and market salary rates still need to be followed in accordance with the new regulations, however an On-Hire may still have the potential to sponsor an occupation which has now been removed from the TSS Occupation Lists. Further, they may also potentially be able to get a four year visa as opposed to a two year visa.
There is one restriction with using an On-Hire Labour Agreement Company, which is that they are unable to sponsor for Permanent Residency (PR). However, most On-Hire companies have Migration Agents which they work alongside who will be able to provide advice for skilled workers on their best path to achieving PR.
In essence, using an On-Hire Agreement Company is similar to outsourcing. In the same way that you outsource your payroll or marketing, you may find using an On-Hire Company is an easier way to deal with 457/TSS Visas. Further, it also removes a percentage of upfront costs, ongoing liability, relevant work insurances, and compliance that’s required through sponsoring direct.

Purnima Kabra