Unlocking Talent: Employer Sponsorship and the Future of Skilled Migration

Employer sponsorship provides businesses with an opportunity to bring in skilled workers from overseas to support their operations, but it’s not as simple as just selecting a candidate and offering them the role. There are detailed visa requirements, government regulations, and compliance obligations that employers and their advisors need to work through, and understanding and being able to navigate this process has become increasingly important as Australia’s demand for skilled workers grows.

On top of that, the government has been busy reviewing and reforming parts of the skilled migration system, which means the rules and processes can change quickly. Businesses and workers alike must continue to stay afloat of the latest policies, and ensure they have access to clear, practical guidance to navigate a spectrum of real-world scenarios.

Migration Regulations 1994 (Cth) (Regulations)

Migration Amendment (2024 Measures No. 1) Regulations 2024

• In this case, the Fair Work Ombudsman secured a record $15.3 million in penalties against the former operators of the Sushi Bay restaurant chain and its sole director, Yi Jeong ‘Rebecca’ Shin, for deliberately underpaying 163 predominantly migrant workers more than $650,000. The Federal Court of Australia found the contraventions were serious, systematic and involved falsified records and unlawful cashback arrangements, describing the conduct as “calculated and audacious.” The Court ordered that workers be back-paid in full and directed that, if company funds were insufficient due to liquidation, part of Ms Shin’s personal penalty be used to rectify the outstanding underpayments.

• The field of immigration law has experienced significant changes and challenges recently. This dynamic environment has kept practitioners and stakeholders on their toes as they navigate evolving regulations and policies.
• The Australian government annually determines the number of migrants allowed entry, with 185,000 visa spots allocated for the migration year 2025-2026, mirroring the previous year’s allocation. This total encompasses various visa categories, including partner, skilled, and refugee visas, with 44,000 spots designated within this framework.
• The migration program consists of 105,000 placements, with 44,000 spots currently accounted for. This represents approximately 24% of the total program capacity.
• Immigration is often perceived primarily as a means for individuals to seek a better life in Australia, but it also plays a crucial role in addressing business needs by connecting skilled workers with Australian employers.
• The employee sponsorship program is a significant component of Australia’s migration strategy, accounting for approximately 24% of the annual positions allocated for migration, highlighting its importance to the economy.
• Recent challenges in the Australian job market, particularly in the legal sector, stem not from a lack of candidates but from a shortage of skilled individuals who are ready to fill roles due to lengthy education and registration processes.
• Despite Australia having a high number of migrants, approximately 770,000, who are eligible and eager to work, employers often face difficulties in identifying suitable candidates, with many of the most qualified individuals potentially requiring sponsorship to join the local workforce.
• The legal industry is currently facing a significant skills shortage, a surprising trend given its traditionally stable nature. Recent data indicates that this shortage is prevalent across all states, encompassing both regional and non-regional areas.
• Labour market testing is a critical component of the visa program, ensuring that employers first seek candidates from the local workforce before resorting to sponsorship for foreign workers.
• Employers must follow specific legislative guidelines for advertising and market testing, while ensuring that the candidate meets visa requirements, as both the role nomination and the applicant’s eligibility are critical components of the sponsorship process.
• These labour market testing requirements not only safeguard Australian job opportunities but also maintain the integrity of the labour market by preventing the establishment of a secondary economy that favours cheaper labour.

• To effectively address these skill shortages and meet government targets, it is crucial to incorporate skilled migration alongside domestic policy initiatives.
• Employers aiming to optimize their hiring processes should consider utilising a strategic approach that includes seeking advice and following established templates, which can facilitate efficient labour market testing.
• By doing so, they can more easily navigate the sponsorship of non-Australian candidates while ensuring that their recruitment efforts effectively yield suitable candidates, whether domestic or international.
• It is important to be aware that immigration law often contains nuanced exceptions and detailed stipulations.
• When considering sponsorship, it is recommended that you seek legal guidance on the applicability of international trade obligations.

Nixon, C, 2023, Report of the Rapid Review into the Exploitation of Australia’s Visa System, Department of Home Affairs (Australia). 

Coates, et al., 2023, Short-changed: How to stop the exploitation of migrant workers in Australia, Grattan Institute.

The Australian Government’s Migration Strategy, released 11 December 2023.

Australia’s facing some pretty big skill shortages right now across a whole range of industries. From healthcare to construction, technology, hospitality, businesses are finding it a little hard to find the people that they need to keep things running smoothly. And while training up local workers is part of the solution, a lot of employers look overseas to fill more urgent gaps, and that’s where a keen understanding of the options available in immigration law, in particular, employer sponsorship, can play an invaluable role in supporting businesses.

On top of that, employer sponsorship can provide businesses with an opportunity to bring in skilled workers from overseas to support their operations, but it’s not as simple as just picking a candidate and offering them the role. There’s visa requirements, government regulations, compliance obligations that employers and their advisors need to work through, and then understanding and being able to navigate this process has become increasingly important. As Australia’s demand for skilled workers grows, and on top of that, the government has been busy reviewing and reforming parts of the skilled migration system, which means the rules and processes can change pretty quickly.

To walk us through all the ins and outs of employer sponsorship and some of these recent changes, and welcoming back to the show, Marsha Bassily from MB Lawyers. Marsha’s helped countless businesses and workers navigate the sponsorship system, and she’s here to share her insights on the challenges and opportunities around employer sponsorship.

Marsha, thank you so much for coming back on Hearsay.

TIP: Across major migration systems, employer-sponsored visa fees are formally explained in policy language that emphasises administration, training, public services and integrity. In Australia, Visa Application Charges are described as payments for processing and managing applications. They vary depending on the visa subclass and are updated periodically. Official materials frame them as charges that sustain the migration system itself, covering decision-making, compliance activity, staffing and infrastructure. Comparable explanations appear in the United States, where base filing fees for H-1B petitions are presented as funding adjudication and program administration within U.S. Citizenship and Immigration Services.

Layered over these core fees are additional levies that governments openly link to labour market policy. The United Kingdom imposes an Immigration Skills Charge on sponsoring employers, introduced with the stated aim of addressing domestic skills gaps and encouraging investment in local training. Revenue is directed toward education and workforce programs. In Australia, the Skilling Australians Fund levy operates in a similar way, payable by the sponsoring business and expressly prohibited from being passed on to the visa holder. In the US, employers sponsoring certain H-1B workers must also pay an ACWIA training fee, described as supporting training initiatives for U.S. workers. In each jurisdiction, these levies are articulated as mechanisms to channel funds into domestic workforce development while influencing employer hiring decisions.

Public service contributions are also part of the structure. In the United Kingdom, the Immigration Health Surcharge is paid in addition to visa fees and is justified as a contribution toward use of the National Health Service during a migrant’s stay. Australia and the US do not impose an equivalent annual surcharge, but both require health insurance and medical examinations, described as measures to safeguard public health systems. Integrity measures form another component. In the US, a Fraud Prevention and Detection Fee that is $500 USD applies to certain H-1B petitions. Government guidance states that the revenue funds investigations, compliance monitoring and site visits to maintain the integrity of employment-based visa programs.

Taken together, these charges are consistently explained in official sources as serving identifiable policy functions. They sustain administrative systems, fund domestic training, contribute to public services and support enforcement. The structure of the fees, particularly where legislation prevents recovery of certain levies from the migrant worker, reflects an intention to allocate responsibility to sponsoring employers in line with those objectives.

However, while governments have outlined the official rationale for skilled visa fees, the public debate moves to a more pointed set of questions: Are these charges proportionate? And what effect are they having on the labour markets they are meant to support? Across destinations such as Australia, the UK and the US, costs have trended upward. In Australia, core skilled permanent visa subclasses now sit at around $4,910 AUD for a primary applicant, with employer-sponsored pathways also increasing. In the UK, a multi-year Skilled Worker visa, once application fees and the Immigration Health Surcharge are factored in, can run into many thousands of pounds for a single worker, and far more for a family. And as Marsha has just mentioned – in the US, proposals for an additional $100,000 USD charge on certain H-1B filings have ignited fierce debate.

Employers argue that, taken together, these settings reshape the economics of recruitment. Large multinational firms may be able to absorb higher sponsorship and compliance costs. Small and medium enterprises often can’t. Business groups in both Australia and the UK say flat national pricing structures fall unevenly, placing a heavier relative burden on regional employers and smaller operators. Salary thresholds are also central to this debate. The UK has lifted the general Skilled Worker salary requirement to £41,700 or the occupation’s going rate. Australia has indexed its key income floors, with the Temporary Skilled Migration Income Threshold and new Core Skills thresholds rising to around $76,515 AUD in 2025, and specialist streams exceeding $141,210 AUD. Governments describe these figures as wage safeguards, but critics respond that they function as a de facto cost filter, pricing out sectors where genuine shortages exist but market salaries sit below national benchmarks.

Family costs further compound the issue. Because many charges apply per person and per year, the total outlay for a worker with dependents can escalate quickly. Migration lawyers and advocacy groups argue that this tilts long-term settlement pathways toward higher earners, raising equity concerns. At the centre of the controversy is transparency. Supporters maintain that robust pricing reinforces integrity and ensures employers invest in domestic training alongside overseas recruitment. However, detractors question whether escalating fees are drifting beyond cost recovery into a broader policy instrument, one used to moderate migration numbers, shape political messaging, or signal toughness on borders.

And you know, some of these changes that we’re gonna talk through today show a very different policy objective on the part of the Australian government to encourage skilled workers to consider Australia as a, as a destination for their work. We’re gonna be talking about today, for example, longer periods to find alternate work if your sponsorship is terminated. You know, all sorts of changes that make it a little bit easier to get an employer sponsored visa. But something I wanted to ask, just maybe anecdotally, since those changes in the US have you seen an increase in employer sponsored visas here in Australia. Do you think some of that deflection or brain drain that has been talked about in the media is happening?

TIP: Marsha has just mentioned that Australia is facing various skill shortages. For several years now, government labour-market data has been pointing to the same conclusion; key parts of the economy are short of skilled people, and those shortages are proving quite stubborn.

Much of the evidence comes from Jobs and Skills Australia, the body that’s responsible for tracking workforce trends. Its reports show that while overall labour shortages have eased slightly since the post-pandemic peak, a significant share of occupations remain in shortage and many have been continuously so since 2021. These are concentrated in sectors that underpin essential services and long-term national priorities. Healthcare is the most frequently cited example. Hospitals, aged-care facilities and disability services continue to struggle to recruit doctors, nurses and care workers. And unfortunately, while demand is rising as the population ages, training pipelines remain long and attrition remains high. Even modest improvements in workforce numbers are often absorbed quickly by growing demand.

Construction and engineering face similar pressures. Trades and technical specialists are critical to housing delivery, transport infrastructure and energy projects. Persistent shortages in these roles have flow-on effects. They delay projects and add cost pressures at a time when housing supply and infrastructure delivery are already under strain. Education remains another area of concern. Early childhood educators and school teachers, particularly in certain subject areas, continue to be difficult to attract and retain. And the challenge is magnified outside major cities. Jobs and Skills Australia data shows that some occupations are in shortage only in regional areas, which highlights how uneven labour supply can be between rural and metro areas. Digital and technology-related roles also feature prominently. Software engineers, cybersecurity specialists and ICT professionals remain in high demand as both the public and private sectors become more reliant on digital systems. At the same time, industries linked to the clean-energy transition are driving demand for new combinations of engineering and technical skills.

What all emerges from this data is a picture of shortages which cannot be resolved super quickly. Training pathways for professions like medicine, engineering and teaching take years to complete. And retention challenges, particularly in care roles and regional jobs, continue to erode our workforce numbers. Technological change is reshaping demand faster than domestic training systems can always respond. All of these realities sit at the heart of the Commonwealth’s Migration Strategy released in December 2023. The government’s narrative is that the migration system had become too fragmented and reactive, and that we needed reform to better align visas with real labour-market needs. The new Skills in Demand visa framework, which replaces the previous Temporary Skill Shortage model, is designed to more closely target occupations supported by our workforce evidence. 

Central to this shift is the introduction of a Core Skills Occupation List. The aim is to anchor eligibility decisions in up-to-date analysis rather than constantly changing ad hoc lists. At the permanent level, the Migration Program continues to prioritise skilled migration, and from 2025–26 will move to a four-year planning horizon intended to support longer-term workforce planning. In policy terms, migration reform is being presented as a practical response to ongoing skills gaps. It is one lever among many, alongside domestic education, training and workforce reforms, that are all intended to support industries under sustained pressure while Australia works to build its future skills base.

Now before I get into some of the big changes in the temporary skill shortage visa class, let’s talk a little bit about some of the challenges that businesses face trying to find employees to consider for sponsorship, because as we said at the top of the episode, it’s not as easy as, you know, just picking from a panel of well qualified, you know, ready to move candidates. What  are some of the challenges that your clients see when they’re looking for staff from overseas and trying to get them here on an employer sponsored visa?

And that’s where the sponsorship falls into play. In saying that recruitment’s not necessarily a challenge, is the reality that in Australia at the moment we have the highest number of migrants hanging around on other visas. They’re here on student visas. They’re here on working holiday visas. I think the figure is 770,000 migrants that, as I said, are hanging around, ready to take up a role, ready to want to stay on, ready to use their skills and find an employer or connect with an employer who’s willing to sponsor them. So again, that finding piece isn’t really the biggest challenge. It’s a challenge, but it’s not the biggest challenge.

TIP:  Now, Marsha is talking about the obligations under labour market testing and the reasons why we have labour market testing requirements. Now, while there was no one single event or landmark case that forced Australia to redesign its temporary skilled visa system, the catalyst for these reforms was a slow and steady accumulation of scandals, court cases, inquiries and investigative reporting over the span of several years that exposed how vulnerable many temporary migrants had become within employer-sponsored visa settings in Australia.

One of the earliest and most emblematic episodes was the 7-Eleven wage-theft scandal. In 2015, a joint investigation by Fairfax and the ABC’s Four Corners revealed systemic underpayment of workers across the franchise network. Many were international students or temporary visa holders. Some were reportedly paid as little as 47 cents an hour. Timesheets were falsified to disguise breaches of visa work limits and award rates. Under mounting public pressure, 7-Eleven established a wage repayment program in response that ultimately returned more than $150 million to over 3,600 workers. The case became shorthand for how easily temporary migrants could be exploited at scale.

In the years later, courts confronted similar patterns. In Fair Work Ombudsman v Sushi Bay Pty Ltd (in liq) (No 3) [2024] FCA 869, the Federal Court imposed record penalties of around $15.3 million against the operators of Sushi Bay restaurants. Among the affected workers were subclass 457 visa holders who were required to pay back hundreds of dollars from their wages each fortnight in so-called “cashback” schemes. The Court emphasised the particular vulnerability of visa-dependent employees, and their decision reflected an intention to deter other employers from similarly exploiting workers. 

By the mid-2020s, the Fair Work Ombudsman reported filing more than 140 litigations involving visa-holder workers and securing close to $23 million in penalties. These litigations reflect recurring features of flat rates below award, unpaid overtime, falsified records and the use of visa status as leverage. Policy reviews have reinforced this picture. The Nixon Review into exploitation of Australia’s visa system argued that migration settings themselves could enable abuse. The Grattan Institute’s “Short-changed” report recommended greater portability for employer-sponsored workers and the creation of a dedicated Workplace Justice visa, so migrants could pursue claims without risking cancellation. Taken together, these cases and reports built a political and evidentiary case for reform. The conclusion drawn by the government was that structural features of the old Temporary Skill Shortage framework, particularly tight employer ties and limited mobility, were contributing to a power imbalance. And the subsequent redesign into the Skills in Demand visa, alongside longer grace periods and new compliance powers, was presented as a response to this sustained body of evidence.

TIP: As Marsha has just mentioned, on the 7th of December 2024, Australia introduced a major redesign of its main temporary skilled work visa. The Temporary Skill Shortage visa, known as subclass 482, was replaced by the new Skills in Demand visa. The subclass number has stayed the same, but the structure and rules behind it have changed in significant ways. Under the previous system, eligibility was divided across short-term and medium-term occupation lists. That framework has now been replaced with a three-stream model intended to be clearer and more closely aligned with labour market data. The Core Skills stream covers most employer-sponsored roles. Applicants in this stream must meet a Core Skills Income Threshold set at just over $73,000 AUD for 2025-26. This threshold will be indexed each year and is designed to sit above the former Temporary Skilled Migration Income Threshold, reinforcing minimum pay standards. 

Alongside this is the Specialist Skills stream. This pathway does not rely on an occupation list. Instead, it uses a high guaranteed salary floor of around $135,000 AUD. And this approach is pretty straightforward; where an employer is offering remuneration at that level, the role is treated as high-value specialist work. This is particularly relevant to sectors such as technology, engineering and finance. The Labour Agreement stream continues unchanged in principle, allowing employers to negotiate specific arrangements with the government where standard criteria do not meet industry needs. There are also important changes for visa holders themselves. The minimum work experience requirement has been reduced from two years to one within the previous five years. Workers who leave their sponsoring employer now have up to 180 days at a time, and up to 365 days in total, to find a new sponsor while remaining lawfully in Australia. Our compliance settings have been strengthened, including closer data-matching with tax authorities and heavier penalties for underpayment. Overall, the Skills in Demand visa reflects a shift toward clearer salary thresholds, streamlined occupation settings and greater worker mobility, while preserving pathways to permanent residence for eligible applicants.

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