Businesses seeking to employ overseas staff on 457 visas must enter into a business sponsorship agreement with the Department of Immigration and Border Protection. One of the key requirements for businesses that have been operating for more than 12 months is to demonstrate they meet one of the two training benchmarks.

• Training benchmark A: the business must have contributed an amount equivalent to 2 per cent of gross payroll to an industry training fund or relevant university or TAFE in the past 12 months.
• Training benchmark B: the business must have spent an amount equivalent to 1 per cent of gross payroll on training staff in the past 12 months.

Once businesses are approved as sponsors, they have an ongoing obligation to meet the benchmark in each 12-month period from the date of approval for the duration of the sponsorship. They must also maintain records of training expenditure.

It can be straightforward to monitor benchmark A because it most often involves a single donation in each 12-month period. Benchmark B is more complicated and there are a number of potential issues employers need to manage.

Tracking benchmark B

For many large businesses with established training plans, the most pressing issue will be how to track annual expenditure from the date of approval. Training expenditure in large organisations is likely to be tracked, but it must be done in sufficient detail and in a way that allows the data to be extracted based on the dates required. Steps may need to be added to accounting systems to produce this data.

In smaller businesses, the challenge is to appropriately track and manage the training. Simple steps, such as centralising training invoices and tracking expenditure on spreadsheets, can ensure that a business is meeting its obligations.

The most important factor for all businesses is to determine how they will track ongoing training expenditure and put in place systems that are monitored on a regular basis. Quarterly reviews are an effective means of ensuring any issues can be addressed early and that a business is on target to meet the benchmark.

Paying for training

Only expenditure by the entity that holds the business sponsorship can be counted towards benchmark B.

For large businesses operating through multiple entities, the first step is to ensure that the sponsoring entity is responsible for expenditure. Critically, the sponsoring entity must be the same entity that has payroll expenditure.

Issues can arise due to company structures. It may be necessary to discuss them with your migration agent prior to obtaining the sponsorship.

What to track

Knowing what can and can’t be counted as training expenditure is another important factor. The legal instrument that establishes the benchmarks sets this out, including payments for external training, the appropriate types of training and the status of travel costs.

Businesses conduct a wide range of training that sometimes doesn’t fit neatly into the department’s categories, or it falls into a ‘grey area’. The types of training you do should be discussed with your migration agent to ensure the expected costs can be attributed to benchmark B.

Late applications

In some cases, businesses will realise too late that they haven’t met the training benchmark for a given 12-month period. To remedy this, it may be possible to meet an overall training spend of 1 per cent in the full three-year sponsorship period. However, it is necessary to put a case to the department that such an arrangement is reasonable.

Failing to meet the benchmarks

The consequences of failing to meet the benchmarks can be severe for businesses that rely on their ability to sponsor staff. Businesses seeking to renew their sponsorship agreement must demonstrate that they met the benchmarks during the period of the previous sponsorship or they won’t get renewal approval.

Where business sponsors support staff to apply for permanent residency under the Employer Nomination Scheme 186 visa, they must demonstrate that they have met the training benchmark in the 12 months prior to the application where the application is reliant on having worked for two years with the sponsor (known as the temporary resident transition stream). If they can’t demonstrate this, the 186 application will fail.

Schedule regular reviews

As with all of the sponsorship obligations, it’s important that businesses are aware of their training obligations and institute systems and processes to monitor and manage compliance. Scheduling regular reviews of the obligations, ideally once a quarter, goes a long way to achieving this.

Meeting the training benchmarks can be complex. Where there’s uncertainty, businesses seeking to continue to sponsor staff should seek appropriate professional guidance.