Labour Agreements (on-hire industry) for Recruitment & Payroll Management Agencies

Labour Agreements Payroll Agencies

At a time when the media seems fixated on the skills shortages that plague Australian employers especially for regional Australia, many market sectors are experiencing great difficulty sourcing local workers forcing a growing number of recruitment agencies to look farther afield for ‘talent’, but the majority are doing so, without realising the many benefits of obtaining access to a Labour Agreement through the Department of Home Affairs (DOHA). 

In September 2007, the Department of Home Affairs (DOHA) introduced a policy for all Australian on-hire firms (recruitment/payroll agencies) who require recruiting overseas workers to hire out to unrelated businesses must request access to a Labour Agreement to meet the needs of the on-hire industry. 

As there are no policy guidelines in the Migration Act which can assist employer applicants understand how to meet the criteria, and due to the lengthy processing timeframes, these agreements have scared a lot of potential labour hire companies away from applying.  

Following the stringent sponsored working visa changes that took place in March 2018, small to medium size businesses are left with no option but to turn to recruitment agencies and payroll management agencies with access to a Labour Agreement to source and sponsor skilled overseas workers. Currently there are only about 35 agencies with access to a Labour Agreement (on-hire industry type) as listed by the DOHA: 

https://immi.homeaffairs.gov.au/visas/employing-and-sponsoring-someone/sponsoring-workers/nominating-a-position/labour-agreements/list-of-current-labour-agreements#

Being a party to a Labour Agreement, recruitment and payroll management agencies can gain access to a number of benefits including but not limited to:

  • A 5 years’ agreement period (it used to be 3 years);
  • Full access to all of the occupations listed in the ‘eligible skilled occupation’ set by the Department of Home Affairs. This means that you can nominate skilled overseas workers in any listed profession/occupation: https://immi.homeaffairs.gov.au/visas/working-in-australia/skill-occupation-list
  • An additional source of income (than standard recruitment/payroll fees) without exploiting the overseas worker, cutting wages or breaching the requirements and obligations of the Agreement;
  • An added-on service solution to your clients who require access to skilled overseas workers without the hassle of sponsoring directly and in dealing with the Immigration Department; 
  • There are no penalties or additional costs associated in case you own it and you don’t use it; and
  • Quick processing timeframes for sponsored working visas in comparison to standard sponsorships. The standard processing timeframes are an average of one week to get a sponsored working visa for your candidates in comparison to a few months through the Standard Sponsorship Program (SBS). 

Diana Faraj, Managing Director at IMMIGATE has assisted a number of recruitment agencies (including a public listed agency, Robert Walters) to gain access to such agreements and successfully managed the required compliance reports and obligations. As the talent market continues to tighten, and in the wake of stringent sponsored working visa changes the timing could not be better for agencies to pursue these agreements. 

Why consider applying for a labour agreement Today:

  • With the introduction of online submissions, the DOHA has made it easier for companies to apply for Labour Agreements online rather than having to submit a pro forma business case as it was done in the past;
  • Compliance requirements have become a lot easier to meet; 
  • It is not as expensive or complicated as commonly perceived; and
  • Have it handy before the rules change! There is no harm in being a party to one, even if you don’t use it on regular basis.

Diana has some final advice for those contemplating or, already an existing party of a Labour Agreement:

“Not every labour hire business is suitable to apply for a Labour Agreement.  It is very important to conduct a thorough assessment to check eligibility before commencing any work directly.  From there, we can make recommendations as to the most appropriate manner in which to proceed and will implement the required steps to satisfy the criteria and perform all the related functions and tasks.”

“If you are using them, don’t wait until the last minute to renew an existing Labour Agreement because renewals can be prepared at least six to nine months earlier.  Leaving them to the last minute can cause costly delays and major issues with your clients and candidates.”

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