There are two subclasses of visa most common among backpackers – 462 and 417. Both these visas are for people between the ages of 18 and thirty. Unhelpfully, a 462 visa is called a ‘Work and Holiday’ visa and a 417 a ‘Working Holiday’ visa.
Some of the differences between the two are immaterial to employers, but the most obvious relevant difference is that a 462 visa is limited to one year in duration, while a 417 visa can be renewed for a further year, subject to conditions.
The practical difference between the 462 and 417 subclasses of visa is not so much the duration of each, as 417 visa-holders wanting to renew must demonstrate that they have worked at least 88 days in the initial year. Consequently, these people may be anxious to reach this target of recorded working days.
This desperation is one of the factors that makes backpackers vulnerable to exploitation by unscrupulous employers, as reported recently in the media. However, the laws of Australia – notably employment laws – apply to backpackers just as they do to Australian citizens.
Overseas backpackers working legally are entitled to pay and benefits as though they were Australian citizens.
These include being paid in accordance with the relevant Modern Award, having the employer pay an amount equivalent to 9.5 per cent of gross pay into a complying superannuation fund if the backpacker earns more than $450 per month and having the protection of workplace health and safety laws (in NSW, the Work Health and Safety Act 2011).
Your obligations as an employer of backpackers
As an employer, your very first obligation is to check personally that a potential backpacker employee has the right to work in Australia, and satisfy yourself as to how long that right will last. This means either an appropriate visa or evidence of Australian citizenship or residency and (in all cases) a tax file number.
It cannot be emphasised enough that this obligation is personal. According to a recent media report, an employer explained that he engaged backpackers through a labour hire firm, because the firm would “dodgy up the paperwork”, presumably to disguise the fact that the potential employees did not meet legal requirements.
It is an offence under the Migration Act 1958 for someone to knowingly or recklessly permit a person to work illegally. It is essential to understand that you cannot insulate yourself from illegality by, in effect, looking the other way, sticking your fingers in your ears and whistling loudly.
You will be held complicit if – as the courts would see it – you knew or ought to have known that the law was being flouted. You will be held ‘reckless’ if you did not know whether or not a backpacker could work legally, and you were aware that you did not know this detail.
Deliberate or reckless employment of illegal workers is punishable by imprisonment for up to two years, which rises to five if you knew that the worker was, in addition, being exploited.
Even an innocent mistake can carry a fine, and there’s nothing like a hefty fine to focus your attention, the maximum being around $15,000 for an individual or $80,000 for a company.
The only defence is to show that you took reasonable steps to inform yourself as to the backpacker’s entitlement to work.
It is equally important to emphasise documentation in relation to all requirements, starting, of course, with the eligibility to work, whether that is Australian citizenship/residency or a suitable visa.
Other obligations are:
- To pay according to the Award (or an Enterprise Agreement, if your business has one) and to provide employees with pay slips;
- To withhold tax. At the beginning of December 2016, the tax rate for backpackers was set at 15 per cent;
- To make superannuation contributions (see above); and
- To provide employees with the benefits of the National Employment Standards under the Fair Work Act 2009. There are, of course, exceptions in relation to casual employees and many backpackers will fall into this category.
It is permissible to make deductions from pay for things such as meals and accommodation, but any such arrangement must be documented before it is implemented.
And, if this needs to be said, the monetary value attached to such benefits must be generally in line with commercial values in the locality in question.
Most small business owners/operators are not experts in law or bureaucracy, and here we have an area involving two sets of laws – employment and migration.
A good, free, way to check work entitlements of overseas backpackers is through the Department of Immigration and Border Protection’s Visa Entitlement Online Verification (VEVO) tool.
The website of the Fair Work Ombudsman is a good source of information, and the ATO website is also useful.
A good rule of thumb is to assume that overseas backpackers have the same rights as residents or citizens, unless there is a clear contrary provision. Document your decisions and the rationale for them.
Geoff Baldwin is a lawyer at Stacks Law Firm.