Sanctions for employing illegal workers

Under the Migration Act 1958, serious penalties exist for individuals or businesses that allow non citizens to work without a valid visa, or in breach of the conditions of their visa. In this brief we revisit amendments that came into effect in 2013 and provide tips for employers for monitoring the visa status of workers.

Risks for employers

Despite the seriousness of the issue of allowing workers without an appropriate visa to work in Australia, this is something that still occurs in Australian workplaces.

The government has recently estimated that there could be as many as 62,100 visa overstayers in Australia, with many of these individuals potentially working unlawfully. Based on country of passport, the Department of Immigration and Border Protection (DIBP) estimated that the largest number of overstayers were from China (7,020), Malaysia (6,980), the United States of America (5,240), the United Kingdom (3,660) and India (3,010). Over 90% of over-stayers remain in Australia for up to 6 months past their visa expiry. 37% of over-stayers remain in Australia past 10 years. The majority of over-stayers arrived in Australia on a visitor visa, followed by student visas and other temporary visas.¹

These figures demonstrate that all employers need to be aware of the risks of employing overseas workers unlawfully, and have appropriate procedures in place to ensure compliance with their obligations.

Background

In 2007, the government introduced civil and criminal penalties for employers engaging workers unlawfully in Australia. This legislation made it a criminal offence to:

• “Refer” or “allow” a non-citizen to work without a valid visa. This covers individuals whose visas may have expired or been cancelled, and who are now unlawfully in Australia;
• “Refer” or “allow” a non-citizen to work in breach of the conditions of their visa. This may include 457 visa holders, student visa holders or working holiday makers with limited work rights in Australia.

A review of the 2007 provisions found that they were “wholly ineffective as a deterrent”, because of the high standard of proof for criminal offences.

What’s changed?

Changes made to the Migration Act have made it easier for DIBP to prosecute these offences, with no requirement to prove that a business knew of (or was reckless as to) the person’s visa status.

The Migration Amendment (Reform of Employer Sanctions) Act 2013 came into effect in March 2013. Major changes include:

• The introduction of a “no fault” system for civil penalties. This means that a court can award a civil penalty against a business or individual, even if they were not aware that workers were engaged unlawfully.
• DIBP now has the option to issue infringement notices against employers without the need to apply to a court for a penalty. Penalties imposed by infringement notices are capped at 20% of the maximum civil penalty.
• A new expanded definition of “allows to work” includes anyone who participates in an arrangement, or series of arrangements, that results in a person working unlawfully. This could include direct employers or other parties (such as recruitment consultants or labour hire providers).
• In certain circumstances, “executive officers” can be personally liable for breaches of the provisions.

Recommendations for businesses

Statutory defences exist under the Act for employers who take “reasonable steps at reasonable times” to verify an employee’s work status. These steps can include:

• using a prescribed computer system to verify the visa held by the person – such as DIBP’s Visa Entitlement Verification Online (VEVO) service; or
• viewing an original document, such as an Australian or New Zealand passport or Australian citizenship certificate. Viewing a DIBP visa label or correspondence is not considered sufficient evidence of work rights under the Act.

It is important to emphasise that these obligations exist for all employees (including those claiming to be Australian citizens or permanent residents). All employers, including those who do not formally sponsor overseas workers, should be aware of their obligations and have procedures in place to regularly audit their workforce.

¹Decision Record (FOI Request FA14/18/00326), FOI Documents, Department of Immigration and Border Protection, 3 December 2014.