The long anticipated Migration Amendment (Reforms of Employer Sanctions) Act 2013 was given Royal Assent, taking effect as law from 14 March 2013.

The reforms introduce new civil penalty provisions while also amending the four existing criminal offences, with key elements as follows:

  •  Creation of new ‘non-fault’ civil penalty provisions as well as an infringement notice scheme for people who allow or refer an unlawful non-citizen to work, or allow or refer a lawful non-citizen to work where that individual does not have appropriate work permission. This means there is no need for the Department to demonstrate that the employer knew or was reckless about an individual’s work rights – finding an individual working without appropriate permission will be sufficient
  • Creation of statutory defences where it can be shown that reasonable steps were taken to check and confirm an individual’s work rights
  • Extending the application of criminal offences and civil penalties to hold a person liable where they have participated in an arrangement, or series of arrangements, that led to the employment of an individual who does not have appropriate work rights
  • An extension of both criminal and civil liability, in certain circumstances, to executive officers of bodies corporate, partners in a partnership and members of an unincorporated association’s committee of management, and
  • Creation of search warrant and notice to produce powers to facilitate the investigation of suspected breaches of these offences and civil penalties.

Infringement notices and penalties

The new Act allows DIAC to impose infringement notices where court action is not seen as warranted and also provide advanced evidence gathering powers.

It is expected that the new infringement notice system will be utilised first (unless serious/multiple breaches have occurred, including exploitation) and these infringement notices may impose fines of up to $1,980 for an individual or up to $9,000 for a body corporate.

There have been no changes to the maximum terms of imprisonment for offences under the Act which are two years for a ‘baseline’ offence and five years for an aggravated offence. An aggravated offence would be one where the relevant employee had been found to be the victim of exploitation, trafficking or other unsafe practices.

The fines which may be imposed for breaches of civil penalty provisions under the amended Act are up to $9,900 for an individual or up to $49,500 for a corporation, and the Act allows the Minister to make an application for a civil penalty order within 6 years of an alleged contravention occurring.

Extended Investigation Powers

The Act also introduces extended investigation powers which allow the Secretary to issue a written request for information or documents which may be relevant to a suspected work-related offence or suspected contravention of a work-related provision. Failure to comply with such a request issued under the new Act will result in a penalty of $5,100.

Where justified, search warrants may also be issued and executed under the new Act and include the power to search, operate and seize equipment, including electronic equipment. Failure to comply with an order or direction issued under a search warrant will also result in a penalty of $5,100.

Suggestions and Commentary

The introduction of this new Act, together with further changes to temporary skilled migration program schedule to occur later this month and in July, make it increasingly important for businesses to understand changes in the regulatory framework governing the employment of temporary skilled labour.

With the introduction of statutory defences, even compliant businesses will need to ensure that systems are in place so that the work entitlements of all new employees are checked prior to commencement of work. These systems could include:

  •  Registering as an organisation for access to the DIAC’s ‘Visa Entitlement Verification Online’ system. This system allows registered users to check the visa and work rights for any visa holder in Australia, subject to that person’s consent. It is important to note that any verification provided via this system is valid for three months from the date of issue, so repeat verification will sometimes be required.
  • Requesting evidence of work rights/residential status for all employees, including those who are assumed to be Australian citizens (birth certificates, passports, citizenship certificates etc).
  • Ensuring that lawful non-citizens do not commence work prior to approval of the relevant visa or nomination application by the Department of Immigration – this may be particularly relevant where a 457 visa holder is transferring to a new employer, or a 417 visa holder is nearing the six month permitted employment threshold while waiting on a subsequent 457 visa to be granted.

The amended legislation introduces a tiered system of sanctions which are anticipated to be imposed as a last resort and should have no impact for the majority of employers who obey the law. The new legislation does provide leniency to employers who are to be seen as taking “reasonable” steps to verity work entitlements.