Simply put, if you want to sponsor a foreign worker for a Subclass 457 Temporary Work visa, Subclass 186 ENS visa, or Subclass 187 RSMS (Temporary Residence Transitional) visa then you will need to show that the business has contributed to the training of Australian Citizens and permanent residents. The Department of Immigration sets the minimum expenditure figures – the training benchmark – as:
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Equivalent to at least 1% of payroll on training the business’ own Australian workers; or
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Equivalent to at least 2% of payroll into an approved industry training fund to train Australian workers outside the business.
Payroll figures need to take into account:
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any wages, remuneration, salary, commission, bonuses, allowances, superannuation contributions or eligible termination payments, defined as wages in the Act relating to payroll tax in the relevant State/Territory, that have been paid to employees during the relevant 12 month period; and
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payments made to contractors or sub-contractors during the same period if work provided by the contractor is related to the service/product provided by the business (for example, the contractor is a bricklayer and the business is a construction company) – regardless of whether such payments are included for payroll tax purposes or not.
Payments made to contractors, such as an Accountant or a Migration Agent, who provide a service to the applicant that is not directly related to the service the applicant provides to its customers do not need to be included as payroll expenditure.
The inclusion of contractors and subcontractors can have a huge impact on payroll, particularly in the Trades industry where contracting is common.
When does the Training Benchmark need to be met?
ENS Direct Entry sponsors and initial Standard Business Sponsorship applicants are required to show the training benchmark has been met in the 12 months prior to the application.
ENS/RSMS Temporary Residence Transitional sponsors and Standard Business Sponsorship renewal applicants are required to show the training benchmark has been met in year their most recent Standard Business Sponsorship has been in place while they employed a 457 holder. This usually means showing 2-3 years of training benchmark compliance. The 12 month periods are set from the SBS approval date, and do not generally align with a company’s standard financial year reporting.
I’m a Standard Business Sponsor – what happens if the Training Benchmark is not met?
Failure to meet the training benchmark is a breach of the sponsorship obligations and can have disastrous consequences for the business and their sponsored employees.
Firstly, the business can be prevented from obtaining a further Standard Business Sponsorship and lose their ability to sponsor 457 workers.
Secondly, existing 457 employees looking to apply for an ENS or RSMS visa through the Temporary Residence Transitional pathway will not be able to meet the Nomination requirements, as this requires that the sponsor has met their training obligations.They can lose their ability to apply for permanent residency.
What can a Standard Business Sponsor do to ensure the Training Benchmark obligations are met?
It is crucial that sponsors ensure they have structured, accurate reporting of all training expenditure.
If the business is making a contribution to a training fund, a reminder should be set to make the payment each year, at least one month prior to the SBS anniversary date.
If the business intends to meet the benchmark by training their own staff, then clear records need to be made for all training expenditure, including wages for apprentices and trainees, invoices and receipts for training courses and other associated training costs, and time spent by internal trainers providing formal training to staff.
How can AMVL help?
AMVL have employer-sponsored visa specialists who can provide an assessment on your business’ ability to sponsor a foreign worker, and advice on the requirements for each step of the process. Current or previous Standard Business Sponsors who want to sponsor workers for a permanent visa, renew their business sponsorship, or even just to have a ‘health’ check on their recording processes, are welcome to contact our team for assistance and advice on training compliance.
