Legislation and penalties for employing workers without legal right to work

Employers in Australia have a legal responsibility to ensure that all workers have the right to work. Failing to comply with these obligations under the Migration Act 1958 and related legislation can lead to significant financial penalties and even criminal charges.

 

10 April 2025

This responsibility extends to all workers, whether hired directly or through labour hire companies. Understanding your obligations and taking the necessary steps to verify work rights is essential to avoid serious legal consequences.

Legal Obligations Under the Migration Act 1958

The Migration Act 1958 places strict requirements on employers to verify that all employees have valid work rights in Australia. This applies to all workers, whether they are Australian citizens, permanent residents, or temporary visa holders. Employers must take reasonable steps to confirm a non-citizen’s work rights before employment begins. Sections 245AB and 245AC of the Act outline specific offences and liabilities for hiring unlawful workers.

Checking Work Rights for All Employees

Australian Citizens

Employers must confirm an employee’s right to work via Australian Citizenship by sighting an original Australian passport or birth certificate, or citizenship certificate together with photo identification. While Australian citizens have unrestricted work rights, failing to confirm Citizenship status could lead to accidental non-compliance if the individual is not actually a citizen. There are no other documents that can be used to demonstrate Australian Citizenship (Medicare card, Tax File Number, Library card, or a driver’s licence can be used)

Visa Holders

For foreign citizens, employers must run a check on visa validity and conditions to confirm work rights. This can be done using the Government mandated and provided Visa Entitlement Verification Online (VEVO) system, which provides up-to-date information on an individual’s specific visa, and visa conditions as they relate to ability to work. This can also be managed using software that runs automated VEVO checks via API connection to the VEVO system for you at hire, and at a regular cadence throughout the employee lifecycle.

Penalties for Employing Illegal Workers

Depending on the situation and severity of the issue, most employers will receive an Illegal Worker Warning Notice on the first occasion, which will be followed up with regular audits by Border Force or Fair Work Inspectors. 

For employers who continue to fail audits and fail to comply, employing a person who does not have valid work rights can result in severe penalties. The Fair Work Ombudsman enforces these workplace laws, and this can result in financial penalties against businesses, directors and accessories who do not follow the law. These include:

  • Warning: An Illegal Worker Warning Notice (IWWN) may be issued on the first offence.
  • Infringement Notices: Up to $15,840 for individuals and $79,200 for companies per illegal worker.
  • Civil Penalties: Up to $79,200 for individuals and $396,000 for companies per illegal worker.
  • Criminal Charges: In serious cases, penalties can reach up to $118,800 and/or two years imprisonment for individuals, and $594,000 for companies per illegal worker.
  • Aggravated Offences: If the employer is found to have exploited or coerced a worker without legal work rights, penalties can increase to $118,800 and/or two years imprisonment for individuals, and $594,000 for companies per illegal worker.
  • Sponsorship Sanctions: Businesses sponsoring workers can face additional penalties, including the cancellation of sponsorship approval and being barred from future sponsorship (Australian Border Force).

Other Risks of Employing Illegal Workers

Beyond financial and legal penalties, hiring individuals without legal work rights can result in additional risks, including:

  • Sponsorship sanctions: For organisations with business sponsorship approval used to nominate overseas workers for sponsored work visas (subclass 400, subclasses 482 / 186, subclasses 494/187 etc etc), ability to sponsor can be revoked in event an organisation is found to be in breach of relevant right to work legislation.
  • Reputational Damage: Companies caught employing illegal workers may face negative media coverage, leading to a loss of public trust.
  • Lost Customers and Business Opportunities: Businesses may lose clients, partners, or contracts if they are found to be non-compliant with work rights laws.
  • Operational Disruptions: Investigations and legal proceedings can disrupt normal business operations, leading to productivity loss and increased administrative burdens.
  • Increased Scrutiny: Employers who fail to meet compliance requirements may be subject to ongoing audits and investigations by authorities such as the Fair Work Ombudsman and Australian Border Force.

Best Practices for Compliance

To avoid penalties and ensure compliance, employers should:

  • Verify work rights before hiring: Use the VEVO system for visa holders and sight (to accept and confirm identity) passports / birth certificates / citizenship certificates for Australian citizens.
  • Collect and record consent: Ensure you obtain and keep a record of written consent prior to running a VEVO check on behalf of an employee
  • Record Keeping: Maintain copies of documents confirming employees’ work rights.
  • Conduct regular checks: Visas expire, and visa conditions change. It is a requirement to always ensure you are employing people with the legal right to work. As such you are required to recheck on an ongoing basis throughout employment. 
  • Comply with privacy principles: Implement robust security measures and securely delete or de-identify unneeded data to prevent unauthorised access or misuse.
  • Stay informed: Keep up to date with changes in migration and employment laws to ensure continued compliance.

Employing individuals without valid work rights is a serious offence under Australian law. By verifying work rights, maintaining accurate records, and implementing regular compliance checks, employers can avoid legal risks and create a fair and lawful workplace. 

Seek advice from Registered Migration Agents, Lawyers and compliance experts to ensure your procedures meet legal requirements. CheckWorkRights offers free and no obligation Right to Work Process / Visa Compliance Health Checks for HR teams with a Registered Migration Agent that are unsure if their current process meets legal requirements. Book a time here.

For an easy and reliable way to manage mandatory work rights compliance, consider using a software solution. CheckWorkRights simplifies document collection, consent management,

Disclaimer: The information provided in this article is general only, and not to be taken as Migration Advice. Please be aware that visas and regulations are subject to frequent change. It is advisable to verify the latest information from the Department of Home Affairs (DHA) and or seek specific advice relating to your circumstances from a MARA Registered Migration Agent.

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