Employers sponsoring under the 457 visa scheme are required to meet a number of requirements before they can be approved as a sponsor.
One such requirement is the need to demonstrate their contribution and commitment to the training of Australians by satisfying one of the “training benchmarks” outlined by DIAC.
This article will explain the 2 training benchmarks set by DIAC, as well as seek to address frequently asked questions and provide examples of training which can be counted towards satisfying the benchmarks.
The Training Benchmarks
At present there a 2 possible training benchmarks, and an employer must meet 1 of these benchmarks:
- Employers pay 2 percent of payroll (incurred in the last 12 months) expenditure to an industry training fund related to the employer’s business.
- Employers spend 1 percent of payroll (incurred in the last 12 months) on training their Australian citizen or permanent resident employees.
Both benchmarks require that the employer also makes a commitment to continue their expenditure required by the benchmark for each financial year that they remain a sponsor.
Businesses operating in Australia for less than 12 months (at the time when the application is considered) who cannot satisfy A or B can instead submit a plan in which they outline how they will meet 1 of the training benchmarks within the next year. The plan must be auditable, it must clearly explain the intended expenditure to meet either of the benchmarks and it must show the employer’s clear intention to implement the plan.
A. Employers pay the equivalent of 2 percent or more of recent payroll expenditure (in the last 12 months) to an industry training fund which operates in an industry related to the employer’s business.
Why would an employer use Training Benchmark A since it is more expensive?
Training Benchmark A will be particularly relevant for businesses that have not been able to set up their own employee training program for reasons such as:
- The Business was only recently established; or
- “Sole-trader” businesses (where the owner is the only member of staff and whose training is not counted towards the benchmark - see below); or
- Businesses which employ no Australian citizens or permanent residents.
What is an industry training fund?
An industry training fund is a body created by legislation that is responsible for providing funding for training of eligible workers in certain industries. Many industries, including the construction and mining industries have such training funds.
What if there is no training fund relevant to my industry?
Where there is no industry training fund in a particular sector, employers can instead make a contribution to a recognised scholarship fund that supports education or training for Australian citizens or permanent residents in a University or TAFE course. The course must be related to the employer’s business, although it does not have to directly relate to the occupation of the employees.
Relevant organizations and funds which employers can contribute to in order to satisfy Training Benchmark A are likely to include:
- Royal College of Nursing National Research and Scholarship Fund
- Meat & Livestock Australia and Australian Wool Innovation scholarship
- Nursery & Garden Industry in Victoria (NGIV) scholarships
- Sheep Cooperative Research Centres scholarships
- University of New South Wales Engineering Faculty scholarships
- Curtin Centre for Entrepreneurship
- Chisholm Institute of TAFE
- William Angliss Institute of TAFE
- Sydney Institute of TAFE
- Box Hill Institute of TAFE
- TAFE development centre
- Gordon Institute of TAFE
- Indigenous Business Australia
B. Employers spend the equivalent of 1 percent of payroll (in the last 12 months) on training for their employees who are Australian citizens or permanent residents.
What kind of training can an employer count towards this benchmark?
Employers can count training that is formal, structured and conducted for Australian citizens and permanent residents towards meeting the benchmark. The training must also be independently verifiable, meaning that the employer must be able to show evidence that the training has occurred.
Below are some common types of employee training and current policy commentary: