There are a number of ongoing obligations an approved Standard Business Sponsor is expected to adhere to during the life of their sponsorship – particularly while they employ 457 visa holders.
One of the most important obligations is to ensure that the business meets their Training Benchmark expenditure requirements. The Standard Business Sponsor must contribute to the training of Australian citizens and Australian permanent residents for each year (or part thereof) that the business employs a 457 visa holder while the SBS is valid. The minimum requirements are as follows:
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Expenditure equivalent to 2% of the business’ payroll made up of contributions to an industry training fund; or
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Expenditure equivalent to 1% of the business’ payroll on the provision of training to Australian Citizen and permanent resident employees.
To meet this obligation, training expenditure must be made in each twelve month period commencing on the day on which the sponsor is approved (the sponsorship anniversary).
Earlier in the year, the Department of Immigration clarified their definition of ‘payroll’ for the purpose of calculating the expenditure requirements, and this now includes wages, commissions, allowances, superannuation, and contractor/sub-contractor payments.
On 1 July 2017 the Department introduced new legislation redefining and significantly limiting acceptable expenditure for the purpose of meeting the training benchmarks.
Acceptable Training for Benchmark A
Only expenditure towards an Industry training fund or recognised Scholarship fund will be accepted. The Department will not accept contributions made to training funds operated by Registered Training Organisations (RTOs) or private individuals, or to funds that allocate a percentage or part of the contributions received to commissions or offer refunds for failed immigration applications.
Acceptable Training for Benchmark B
Only training for Australian Citizen and Permanent Resident employees who are not principals in the business or their family members can be claimed. Training undertaken must also be related to the purpose of the business.
External training provider fees
It is possible to claim the course fees for Australian employees to undertake a formal course of study, as well as any reasonable and necessary associated costs for them to attend or access that study (e.g. costs of travelling to the training venue or access an online training programme). It is also possible to claim payments made to Registered Training Organisations (RTOs) to deliver face-to-face training to Australian employees that will contribute to an AQF qualification.
Employment of apprentices, trainees and graduates
100% of the salary provided to an apprentice or trainee can be counted towards the training benchmark. Sponsors should show that there is a formal apprenticeship or traineeship agreement in place that has been lodged with the relevant authority in that state/territory.
If a recent graduate is participating in a formal, structured graduate program for up to two years, or is completing a professional year following their graduate, 100% of the salary provided to this graduate during this time can also be counted towards the training benchmark. The graduate’s salary can only be counted if the occupation in which they are working is relevant or related to the subject of their recently completed qualification. A recent graduate is considered as someone who has completed their higher education studies within the 2 years before lodgement of a nomination.
Training Software
Purchase costs for access to an eLearning platform or standalone training software are acceptable training expenditure.
Employment of a person whose sole role is to provide training
The total salary of person who is responsible for providing training to Australian employees on a full-time basis (i.e. employed by the business as a Trainer) can be counted towards the benchmark.
Conferences
Conference fees may only be counted towards the training benchmark if there is clear evidence that the conference provided a professional development opportunity to the attendee.
Expenditure that cannot be counted towards the benchmark:
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Wages paid to staff while attending training (unless they are apprentices, trainees or recent graduates as above);
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On the job training that is not otherwise identified above;
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Training that is not relevant to the industry in which the business operates;
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Training undertaken by persons who are principals in the business or their family members;
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Training undertaken by employees who are not Australian Citizens or Permanent Residents – including New Zealand Citizens, sponsored workers, and other temporary visa holders.
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Training that has a very low skill level having regard to the characteristics and size of the business;
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Induction training;
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Purchase of software for use in normal duties;
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Membership, registration, or licensing fees;
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Purchase of books, journals or magazine subscriptions;
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Attending conferences for purposes other than continuing professional development;
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Hiring a booth at a trades show, conference or expo.
Previous Approved Sponsor
If your business was approved as a Standard Business Sponsor prior to 1 July 2017, you may be able to claim some expenditure that is no longer acceptable for the purposes of meeting past obligations, but moving forward we strongly suggest that you ensure your expenditure meets the benchmarks above. We also recommend ensuring you have appropriate recording systems for all training expenditure to ensure this evidence is easily accessible in future.
If you are an Approved Sponsor, or are looking to apply for a Standard Business Sponsorship and require specific advice on the training benchmark requirements and acceptable expenditure, please contact our office for assistance.
