Hiring practices in Australia

Requirement for Foreign Employees to Work

1. Visa Requirements for Foreign Employees

In order to legally work in Australia, a foreign employee must have a permanent or valid long-stay visa to work. All foreign workers are guaranteed the conditions of the National Employment Standards in their employment, and employers of foreign workers must abide by both workplace and immigration laws in their dealings.

There are a variety of ways in which Australian businesses can employ workers from non-Australian jurisdictions, but all require the employee to be the holder of one or other of a series of visas (there are exceptions for Australian citizens, New Zealand citizens and Australian permanent residents, who have unlimited permission to work in Australia). Note that this area of law is complex and subject to regular change, and so while expert advice should always be sought, it is strongly suggested that any business contemplating employing non-Australian citizens in Australia should obtain current expert advice before taking any steps.

In very brief terms, a foreign worker will require a valid visa. Visas come in a variety of forms, some permanent and some temporary. All have conditions, both for the worker and for the employer. Penalties apply to employers who breach the immigration laws (including in relevant cases, imprisonment and substantial fines). Some visa forms include:

 Subclass 186—employer nomination scheme visa

Subclass 189—skilled independent visa

Subclass 190—skilled nominated visa

Subclass 485—temporary graduate visa

Subclass 489—skilled, regional (provisional) visa

Note that the employer has obligations regarding costs of compliance and obligations to check entitlement to work. The Government has an online checking system (Visa Entitlement Verification Online (“VEVO”)) for visa holders and employers to use. All employers should regularly review the entitlements of their workers to work in Australia, carry out a regular audit, and ensure they meet the training benchmark for its Australian employees.

Does a Foreign Employer need to Establish or Work through a Local Entity to Hire an Employee?

It is not necessary for foreign employers to establish or work through a local entity in order to hire an Australian employee. However, under the Fair Work Act 2009 a foreign corporation formed outside of Australia is a national system employer and is bound to observe the Fair Work Act in relation to employees who perform work in Australia. As a result, they have a responsibility to comply with the Fair Work Act in relation to their Australian employees. Foreign employers will also be required to provide the employee with a contract specifying their employment terms and conditions, as well as superannuation and “pay as you go” (PAYG) withholding tax payable to the Australian Taxation Office.

Limitations on Background Checks

In Australia, there is no express prohibition on an employer conducting pre-employment checks. There are, however, two broad qualifications to this general position:

• the first is that the employer will generally need the consent of the job candidate concerned to perform the relevant pre-employment checks. However, provided the purpose of the check is to objectively evaluate the candidate’s qualifications and ability to perform the role, the candidate should provide his or her consent. If the candidate fails to do so, then in most circumstances he or she could be fairly excluded from the recruitment process. As part of pre-employment checks, employers may seek to obtain criminal background checks. When relying on a criminal background check as a basis of not hiring someone or for termination, the employer or prospective employer will need to be able to draw a connection between their decision and the inherent requirements of the job, otherwise may be at risk of a discrimination claim (see below);
• the second qualification is that the employer will need to be wary of how it uses the information acquired from the relevant pre-employment checks. This is because improper use of results could potentially constitute:
  • a breach of privacy laws;
  • a breach of State or Federal anti-discrimination laws; or
  • “adverse action” against a prospective employee, in breach of the General Protections provisions of the Fair Work Act.

In addition to federal anti-discrimination laws, there is express protection for employees who believe they have been discriminated against based on their criminal history in Tasmania and the Northern Territory.

Restrictions on Application/Interview Questions

Under the Fair Work Act, Australian Human Rights Commission Act 1986 (Cth), and the State and Federal legislation dealing with sex, age, race and disability discrimination, recruiters and employers are prohibited from a range of discriminatory behaviour during the application and interview process, in relation to prospective employment.

Job descriptions and advertisements must avoid using discriminatory language and avoid references to personal characteristics – such as age, race or sex – unless they are part of the genuine requirements of the job.

Prior to releasing a job advertisement, the employer should ensure that the rate of pay advertised is in compliance with, and not less than, the minimum rates prescribed by the Fair Work Act and any applicable modern award or enterprise agreement. Due to recent amendments to the Fair Work Act on 7 January 2023, employers can be subject to penalties for job advertisements that offer less than minimum rates of pay. This amendment is retrospective, meaning that it applies to job advertisements before 7 January 2023 too.

During an interview for prospective employment, an interviewer should avoid asking about the following matters:

• marital status;
• children, both current and future planned;
• nationality, race and ethnicity (aside from requiring proof of right to work);
• religion;
• political opinion;
• disability;
• sexual orientation, gender identity or intersex status;
• whether English is the candidate’s first language;
• age (unless relevant to an inherent requirement of the job);
• credit history (without consent to run a credit check and a legitimate reason relating to the inherent requirements of the job);
• medical history or problems (unless related to potential health risks associated with the job or ability to perform specific elements of the job).

If at any point during the advertisement, application, interview or intake process, a prospective employee believes that they have encountered discrimination, they are able to make a complaint to the Australian Human Rights Commission, Fair Work Commission or their State Anti-Discrimination Board to investigate.