I am on a 457 visa and my employer has refused to pay my wages in exchange for visa sponsorship. Is this lawful?

I am on a 457 visa and my employer has refused to pay my wages in exchange for visa sponsorship. Is this lawful?

A Temporary Business (Long Stay) visa (457 Visa) allows skilled workers to be employed in Australia when sponsored by an Australian business. Access to this visa entitles the holder to the same rights as those enjoyed by local workers. However, holders of 457 visas are often in a position of vulnerability regarding their rights and are can be taken advantage of by employers.

The recent case of Kaur v Bangari and Karyal Pty Ltd trading as India Gate Warrnambool & Anor,[1] confirmed that it is unlawful for employers to demand someone to work for free in lieu of obtaining a 457 visa. In this case, Ms Kaur was employed as a cook by the first respondent between 23 August 2017 and 2 April 2018. Between 23 August 2017 and 18 March 2018, whilst Ms Kaur’s 457 visa was pending, she received no remuneration despite working 20 hours per week. Around the time her 457 visa was approved, the second respondent (Mr Singh) made numerous demands that she make financial contributions towards the cost of the visa. In March 2018, Ms Kaur’s 457 visa was approved and the first respondent commenced paying her a wage. On 2 April 2018, Ms Kaur was terminated by Mr Singh after she refused to enter into an arrangement whereby she reimbursed the respondents the wages already paid to her.

Judge Riley held that it was unlawful to demand someone to work for free in lieu of obtaining a 457 visa and ordered that the first respondent pay penalties of $126,000 and the second respondent pay penalties in the amount of $70,560. In coming to her decision, Judge Riley followed the approach taken by Judge Bromwich in Fair Work Ombudsman v NSH North Pty Ltd t/as New Shanghai Charlestown,[2] which considered Ms Kaur’s vulnerability and the “deliberate, egregious, and grossly exploitative” nature of the respondent’s breach. She also considered that while the first respondent was primarily responsible for all of the contraventions as the applicant’s employer, Mr Singh was the controlling mind of the first respondent and was largely responsible for all of the contraventions. As such, Judge Riley decided that it was appropriate that the penalties for Mr Singh be a higher percentage of the maximum than the penalties for the first respondent.

The exploitation of 457 visa holders is a significant concern, and this case demonstrates the strong approach that the courts have taken to deter employers from committing such breaches. If you are a 457 visa holder and believe you have been underpaid or your employer is unlawfully deducting your wages, seek legal advice from an employment law expert. For more information regarding the rights of 457 visa holders see https://www.employmentlawonline.com.au/employment-rights-australian-citizen-temporary-skills-shortage-visa/.  

[1] [2020] FCCA 2961 (4 November 2020)
[2] (2017) 275 IR 148[2017] FCA 1301 at [36]

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