Direct employment requirement for 482 and 494 in 2026: contract, control and pay
How the 482 and 494 direct employment rules treat labour hire, contracting and related-entity work, tested by contract, control and pay.
No — on a standard business sponsorship, a labour hire or contracting arrangement will not satisfy the direct employment requirement. The Department of Home Affairs' PAM3 guidance for the Subclass 494 (Skilled Employer Sponsored Regional) visa states that the applicant must be a direct employee of the sponsor or an associated entity, that an independent contractor or labour hire arrangement does not meet the test, and that a labour hire company cannot use standard business sponsorship for the 494. For the Subclass 482 (Skills in Demand visa, formerly the Temporary Skill Shortage visa), the requirement is expressed as a genuine employment relationship with the nominating employer, with the guidance allowing employment by the sponsor or an associated entity unless the occupation is exempt. Both positions come from the Migration Regulations 1994 and the Department's PAM3 guidance.
This article is general commentary on how those rules and that guidance are framed. It is not advice on any individual's circumstances, and the current official pages remain the authoritative statement of the requirements.
What does the direct employment requirement actually say?
The requirement operates at two linked points: the nomination made by the sponsor, and the visa application made by the worker.
For the 494, regulation 494.222 requires the applicant to be employed in the nominated occupation in a position that exists in the nominator's business, or in the business of an associated entity of the nominator. Regulation 494.213(2) separately requires that the applicant's intention to perform the nominated occupation is genuine and that the position itself is genuine.
For the 482, the parallel provisions are regulation 482.212(1), which ties the application to a nomination approved under section 140GB of the Migration Act 1958 that has not ceased, and regulation 482.212(2), which requires a genuine intention on the applicant's part and a genuine position. The Regulations also require a genuine employment relationship with the nominating employer.
The practical consequence is that a nomination can be approved only where the sponsor is the entity that actually employs the worker, and a visa can be granted only where the worker is genuinely employed in that position.
Which indicators decide whether the employment is direct?
The 494 guidance sets the test out as a list of indicators rather than a single document. It names the employment contract, the power to appoint and dismiss, control over the work environment, task allocation, wage payment, tax compliance, leave, work health and safety obligations and superannuation.
| Indicator | What it points to |
|---|---|
| Employment contract | Whether the document is a contract of employment with the sponsor, or a commercial contract for services |
| Power to appoint and dismiss | Who can end the engagement, and who owns any disciplinary process |
| Control of the work environment | Who directs where, when and how the work is performed |
| Task allocation | Who assigns daily tasks and sets priorities |
| Wage payment | Whether wages are paid as an employee, rather than invoices submitted by a business |
| Tax compliance and superannuation | Whether the person is dealt with as an employee for withholding and superannuation purposes |
| Leave and work health and safety | Whether entitlements and safety obligations run on an employment basis |
The 482 requirement is expressed more briefly, but the underlying question is the same: which entity employs the person, and which entity directs and pays for the work. The 482 guidance adds one useful limit — working at the premises of an unrelated business does not, of itself, mean the employment is not direct.
Can an associated entity employ you instead of the sponsor?
Yes, but only if the associated entity is genuinely the employer.
For the 494, regulation 494.222 expressly contemplates a position in the business of an associated entity of the nominator, and the guidance repeats that the person may be employed by the sponsor or an associated entity provided a direct employment relationship exists. For the 482, the guidance likewise allows employment by the sponsor or an associated entity unless the occupation is exempt.
The associated entity route fails where the entity is only a payroll or invoicing shell. If the contract sits with one company, the pay comes from another, and day-to-day direction comes from a third, the indicators above point away from direct employment regardless of which company signed the nomination.
Where do labour hire and contracting arrangements fail?
They fail on the same indicators, read together.
In an on-hire arrangement, the worker's contract is with a labour hire company, that company pays the wages, and the host business directs the daily work. Control and payment therefore sit with different entities, and the person performing the work is not employed by the business whose nomination describes the position. For the 494, the guidance resolves this directly: a labour hire company cannot use standard business sponsorship for the visa.
An independent contractor fails for a related reason. A contract for services, invoicing, and responsibility for one's own tax and insurance are indicators of a commercial relationship rather than employment, and the guidance treats independent contracting as outside the requirement.
Nomination consequences follow. Because the visa application must attach to a nomination that was approved and has not ceased under regulation 2.75 (for the 482) or regulation 2.75B (for the 494), a nomination built on an arrangement that does not amount to direct employment leaves nothing valid for the visa application to attach to. The 494 guidance lists an employment relationship that is not direct — independent contractor or labour hire — among the commonly recorded refusal grounds.
How to test your own arrangement step by step
Read the contract first.
Check whether it is a contract of employment or a contract for services.
Identify who signed it.
Then follow the pay.
Confirm which entity pays you, and whether you are paid wages or submit invoices.
Next, identify who directs the work.
Note who assigns your tasks, sets your hours and can move you between sites.
Finally, identify who can end the engagement.
If the answer differs between these steps, the arrangement is likely to be read as something other than direct employment.
When can a labour agreement change the answer?
A labour agreement is the other sponsorship basis, and both subclasses have a Labour Agreement stream alongside the standard business sponsorship route.
The 494 guidance records that sponsorship may be by standard business sponsorship or by labour agreement, and that under a labour agreement the age, English and skills requirements are set by the terms of the agreement, and if the agreement does not specify them, the standard employer sponsored criteria apply. The 482 has a Labour Agreement stream in addition to its Specialist Skills and Core Skills streams.
That does not make on-hire arrangements generally available. It means the question shifts from the standard direct employment rule to the terms of the particular agreement, and whether those terms permit the arrangement. Any such agreement operates on its own wording, so the position depends on what the agreement actually provides.
Frequently Asked Questions
Can a labour hire company sponsor me for a 494 in 2026?
The guidance states that a labour hire company cannot use standard business sponsorship for the Subclass 494. The visa requires a direct employment relationship with the sponsor or an associated entity of the sponsor.
Can I be employed by a company related to the sponsor?
Yes. Regulation 494.222 allows the position to be in the business of an associated entity of the nominator, and the 482 guidance allows employment by the sponsor or an associated entity unless the occupation is exempt. The associated entity must itself be the employer, not merely the entity that processes the payroll.
Does working at a client's site break the direct employment requirement?
Not by itself. The 482 guidance states that working at the premises of an unrelated business does not necessarily mean the employment is not direct, provided the sponsor or associated entity remains the employer and retains direction and payment of the work.
Is being engaged as a contractor always fatal to the application?
The guidance treats independent contracting as outside the direct employment requirement, so a contracting arrangement is a serious obstacle on a standard business sponsorship. The assessment turns on the indicators as a whole, including contract, control and payment, rather than on the label alone.
Do I still need an approved nomination if a related entity employs me?
Yes. The visa application must attach to a nomination approved under section 140GB that has not ceased under regulation 2.75 for the 482, or regulation 2.75B for the 494. The associated entity arrangement affects who employs you, not the need for a valid approved nomination.
Is the test the same for the 482 and the 494?
The substance is the same — a genuine, direct employment relationship with the sponsor or an associated entity — but the 494 guidance spells out the indicators in more detail. Both subclasses also require that the applicant's intention is genuine and that the position is genuine.