Does using a labour hire company transfer my sponsor obligations in Australia in 2026?
No — a labour hire firm does not move sponsor or employer duties. What stays with the host business in Australia in 2026.
No. Engaging a labour hire company does not move your obligations to someone else. On the Department of Home Affairs page "Information for employers and labour hire organisations", the position is stated directly: using a labour hire organisation does not free you from your obligations to migrant workers, and you must still know and follow the law and ensure workers are treated fairly and not exploited. If your business is also the approved sponsor, the sponsorship obligations that attach to that approval are yours as well. This article is general information about how the rules are framed, not advice on any particular arrangement.
Why the answer is "no" rather than "it depends"
The obligations come from two different places, and neither of them follows the invoice.
The first is sponsorship. If your business is approved as a sponsor, the obligations are tied to that approval and to the person you sponsored. The Department's "Sponsor responsibilities" page groups obligations by sponsor type — standard business sponsors, temporary activities sponsors and accredited sponsors — and requires sponsors to notify the Department of Home Affairs when business circumstances change or when something changes about the sponsored person.
The second is the general law that applies to anyone engaging migrant workers. Under the Migration Act 1958, employers and labour hire organisations (LHOs) can both face criminal charges and/or civil penalties, including large fines, if they exploit temporary migrant workers. Both sets of duties can sit on your business at the same time, and a contract with an agency does not redirect either one.
What you still have to do when workers are supplied to you
The Department sets out the practical steps for employers who use migrant labour, whether recruited directly or through an agency.
- Check visa work conditions through VEVO before the person starts, and get the visa holder's permission first.
- Do not hire a non-citizen who does not hold a valid visa, or hire them to do work that goes against their visa conditions.
- Do not pressure a non-citizen without a valid visa into working.
- Pay correctly and treat workers fairly under Australian law, including the Fair Work Act 2009 and the Migration Act 1958.
Under the Fair Work Act 2009, all visa holders and migrant workers have the same workplace rights and protections as other employees in Australia, regardless of their migration status. That is the baseline, and it does not vary with who did the recruiting.
Suppose a host business takes a subclass 482 visa holder supplied by an agency and puts them into a role different from the one approved when the visa was granted, at a lower rate than the agreed salary. The agency may have made the placement, but the conduct described is exactly what the Department lists as reportable employer conduct: making a sponsored worker do a different job from the approved one, and paying less than the salary agreed when the visa was granted.
What counts as exploitation when an agency is involved
The Department's list is specific, and it applies to employers. It is against the law to keep a migrant worker's passport, threaten to cancel a visa, threaten to report a worker to immigration authorities, pressure someone to work more hours than their visa allows, threaten future visa applications, force workers to live in unsafe, dirty or crowded housing as part of the job, sexually harass a migrant worker, underpay a migrant worker, ask a migrant worker to repay sponsorship, nomination or recruitment costs, or ask a migrant worker for money in exchange for visa sponsorship.
One point is worth stating plainly because it removes a common assumption: exploiting migrant workers is illegal even if the workers are doing paid or unpaid training, have broken their visa rules, or do not hold a valid Australian visa. The worker's own status is not a defence for the business. The Department's "Case studies" page illustrates this with a labour hire company that supplied a worker whose tourist visa had expired, underpaid her, and then threatened to report her when she complained — conduct described as already breaking the law, with possible additional criminal charges under the newer offences.
What the penalties look like
Penalties sit at two levels, and the published figures differ between them.
| Where the breach sits | Possible consequences published by the Department |
|---|---|
| Migration Act 1958 — serious, deliberate or repeated breaches | Up to 5 years' jail; fines of up to $131,040 (360 penalty units) |
| Breaching a prohibited employer prohibition | Criminal prosecution, up to 5 years' jail, and/or a fine of up to $131,040 (360 penalty units), or both |
| Sponsorship obligations — infringement notice | $79,200 for a body corporate or $15,840 for an individual, for each failure |
| Sponsorship obligations — civil penalties imposed by the courts | Up to $396,000 for a body corporate and $79,200 for an individual, for each failure |
Sponsorship obligation failures can also bring cancellation of approval as a sponsor, a ban on sponsoring other workers, a ban on making future applications for approval, a compliance notice, or an enforceable undertaking. The Department notes that more than one sanction can be imposed. Separately, a sponsor penalised for exploiting migrant workers can have its business name, or an individual's personal name, made public on the register of sanctioned sponsors.
The prohibited employer scheme operates alongside this. The Minister for Immigration may designate an individual or a corporation found guilty of serious breaches of the Migration Act 1958, and the length of the prohibition depends on the findings: no maximum length for human trafficking and modern slavery, up to 10 years for a criminal offence other than those, and up to 5 years for all other migrant worker sanctions. Once designated, the business cannot employ any new temporary visa holders, though temporary visa holders already working there at the time of the declaration may continue if they wish.
What to put into the contract with the labour hire organisation
The Department suggests considering a clause in your contracts with LHOs that requires them to use VEVO to check the visa conditions of potential workers, and to ensure all their migrant workers are paid correctly and treated fairly under Australian laws, including in accordance with the Fair Work Act 2009 and the Migration Act 1958.
A clause of that kind is worth having because it fixes who does what, but it does not shift the underlying duty. It also gives you something to check against: if the agency cannot show that VEVO checks were done, the gap is visible before a worker starts rather than after.
How the two regimes fit together in practice
Because the obligations run in parallel, a single failure can be examined from more than one direction. Underpayment of a sponsored worker is a workplace matter under the Fair Work Act 2009 and can also be a sponsorship obligation issue. Allowing a sponsored worker to do a different job from the approved one is listed by the Department as employer conduct that can be reported to Border Watch, and it also goes to whether the sponsorship obligations have been met.
The Department's page also records the reporting channels it points to: the Fair Work Ombudsman for workplace rights advice and for reporting employers who are not following workplace laws on pay, leave and discrimination, and Border Watch for conduct such as taking migrants' passports, using a migrant's visa situation to threaten or force them to work, or forcing migrants into overcrowded and unsafe housing. Reports can be made without giving your name. Whether any of this applies to a particular workplace is a matter for official guidance or professional advice.
Frequently Asked Questions
Does a labour hire agreement move sponsor obligations to the agency?
No. The Department of Home Affairs states that using a labour hire organisation does not free you from your obligations to migrant workers. If your business holds the sponsorship approval, those obligations remain attached to your approval and to the person you sponsored.
If the agency is the sponsor, does the host business still have duties?
Yes. The duties that come from being an employer still apply to the business where the work is actually done. That includes checking visa work conditions through VEVO, not letting someone work against their visa conditions, and paying correctly under the Fair Work Act 2009.
Do I still need VEVO checks if the labour hire firm recruits the worker?
Yes. The Department requires employers to check a potential employee's visa work conditions through VEVO, and to get the visa holder's permission first. It also suggests requiring the LHO to do the same in the contract between you.
Can I be penalised if the worker had no valid visa or broke their visa conditions?
Yes. It is illegal to exploit migrant workers even if they are doing paid or unpaid training, have broken their visa rules, or do not hold a valid Australian visa. The worker's immigration status is not a defence for the employer.
What is the maximum penalty for serious breaches of the Migration Act?
Serious, deliberate or repeated breaches carry up to 5 years' jail and fines of up to $131,040, expressed as 360 penalty units. Breaching a prohibition can lead to criminal prosecution, up to 5 years' jail, and/or a fine of up to $131,040, or both.
How long can a prohibited employer designation last?
It depends on the findings. There is no maximum length for human trafficking and modern slavery, up to 10 years for other criminal offences, and up to 5 years for all other migrant worker sanctions. During the prohibition the business cannot hire new temporary visa holders.
Can existing sponsored workers keep working if my business is declared a prohibited employer?
Yes. Temporary visa holders already working for you at the time of the declaration may continue working for you if they wish. The ban applies to hiring new temporary visa holders.