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Beware the headlong rush on Labour Agreements

Beware the headlong rush on Labour Agreements

Contract professionals on existing 457 Visas and those seeking entry into Australia are being warned to tread with caution when signing on to conditions under Labour Agreements with on-hire agencies. Entity Solutions, which manages the engagement of 2,500 contract professionals is concerned that in the short-term rush to be first to market, individuals on 457 Visas may be left high and dry by on-hire agencies that may not be able to continue meeting the strict requirements in the long run.

Entity Solutions urges caution, provides checklist for 457 professionals

Contract professionals on existing 457 Visas and those seeking entry into Australia are being warned to tread with caution when signing on to conditions under Labour Agreements with on-hire agencies.

Entity Solutions, which manages the engagement of 2,500 contract professionals is concerned that in the short-term rush to be first to market, individuals on 457 Visas may be left high and dry by on-hire agencies that may not be able to continue meeting the strict requirements in the long run.

Since news was announced of changes to the 457 Visa scheme requirements, Entity Solutions has been in the process of assisting enterprise, SME’s and individuals alike to wade through market confusion over the changes. Grappling with conflicting information and delays in responses to key questions posed to the Department, the head of Entity Migration, Lindy Northover acknowledges further clarification has been sought and provided from the Ministers office.

Keen to ensure her customer base understand the changes being implemented and working hard to allay concerns for enterprise and individuals alike that the changes will cause disruptions and bottlenecks to critical business projects, Ms. Northover is urging caution in the face of much confusion.

“The financial obligations on every company subject to these changes are significant and not correctly managed, it could mean companies that rush in now let everybody down in 24 months time. We are taking our time to thoroughly review and research all the implications of these changes before we progress and we urge business and individuals alike to be wary of rushing into new agreements.”

On-hire is a highly competitive environment and there may be the temptation for some organisations to not fully disclose their status under the new rules and regulations. Ms. Northover says there are a number of things those pending confirmation of on or being offered sponsorship under a new 457 Labour Agreement can do to protect themselves:

  • Request a copy of the signed Labour Agreement: Under clause 7.66 of the Labour Agreement, people are entitled to request a copy of the Signed Labour Agreement, and it is highly recommend individuals sight the paperwork before signing up with any on-hire company;
  • Confirm your arrival arrangements are in place: For people relocating from offshore to begin work here, the on-hire company is required to provide you with appropriate on-arrival assistance, including transport from the airport, assistance in finding accommodation, information on how to contact local community groups and the Helplines for the Department of Immigration, the Workplace Authority and the Workplace Ombudsman. If you are helping to make arrangements for a new employee, friend or family member coming from overseas, be sure to guarantee the on-hire company is meeting these obligations.
  • Ensure funds are available for Return Travel: The on-hire company is also required to pay for return airfares to the home country for anyone flying to Australia at the close of the contract period. This includes family members so people should ensure that this is covered under in any new Employment contract and that travel has been arranged through a reputable airline, with a direct flight if possible and to the correct destination;
  • Check that you and your family are covered for Public Health costs: The On Hire company should provide Private Health Insurance coverage for the sponsored individual and their family members, or another appropriate health fund must be arranged. Be sure that any public hospital expenses are covered by the Company in the event of a serious health issue arising;
  • Clarify any accommodation arrangements in initial negotiations: Where accommodation is to be provided by the Company as part of employment, ensure that it is of an appropriate standard and note that there is the choice for individuals to find their own accommodation if that arranged is not suitable or not to the same standard as that provided to Australian employees;
  • Ask what systems are in place to ensure that your salary is paid correctly and that any applicable tax free allowances are applied:
    • Tax-free allowances, such as the Living Away From Home Allowance, may be available to those temporarily working away from their country of residence. There are also amounts that must be withheld to cover income tax and a 9% superannuation to be paid into an appropriate fund on the behalf of the sponsored individual. Ensure that systems are in place so these requirements are applied correctly by the On Hire company’s payroll system to comply with both y 457 visa conditions and the DIAC’s minimum taxable salary levels.
  • Be aware that you are not liable to cover the costs of either recruitment, visa application or any licensing/registration fees: Under the new Labour Agreement terms, these costs should all be covered by the On Hire company who is sponsoring and not deducted from the individual being sponsored.
  • Don’t sign an employment offer or contract until you have reviewed the contents and satisfied yourself that all of the above is covered.
Founded in 1999 and servicing Australia nationally with offices in Melbourne, Sydney and Brisbane, Entity Solutions is the leader in the professional engagement services industry. By combining consulting, management, engagement and migration services, Entity Solutions eliminates the burden of concern and time outlays between Independent Professionals (IPros) and the organisations engaging them.