Governance, Payroll

Right To Work: the most overlooked compliance obligation in Australia?

Because it sits outside the Fairwork Act and other related employment legislation, the obligation of every employer to check (and monitor) the Right To Work of all staff is in my opinion, the most overlooked compliance obligation in Australian HR and Payroll departments.

Compliance enforced by the Department of Home Affairs

Living inside the remit of the Department of Home Affairs is the Migration Amendment [Reform of Employer Sanctions] Act 2013. This legislation imposes specific obligations on Australian employers to validate the Right To Work of employees and contractors, with threats of hefty fines for non-compliance, under no fault / “strict liability” (ignorance is not a defence) system.

I’ve tried to distill the key points of the legislation herein:

Employer Obligations around Right To Work

All Australian Employers have the obligation to validate the legal right to work in Australia of all their staff (employees and contractors). This means, at the point of recruitment/onboarding:

  • Validating Australian citizenship; or
  • Validating the Work Rights of Non-Citizens;

Employing Australian Citizens – confirming citizenship

If an employee or contractor claims to be an Australian citizen, the employer is required to satisfy themselves that this is true, by citing one of the following options:

  • An Australian Passport;
  • An Australian birth certificate + photo ID;
  • An Australian Citizenship Certificate + photo ID;

Employing Non-Citizens – confirming Right To Work is checked & monitored

If the employee or contractor is a non-citizen, the employer has an obligation to validate the Work Rights of the non-citizen according to their visa. This can be done by:

Furthermore, in the case of non-citizens, where the staff member is a temporary visa holder (rather than a permanent resident), the employer must take “reasonable steps, at reasonable times” to validate the Right To Work is maintained throughout their employment.

Why Is Performing Right To Work Checks Now More important Than Before?

The question that commonly arises is:I’ve never heard of these obligations before, nor have I known any employer to be prosecuted. This is 7 year old legislation. It hasn’t mattered to this point, why does it matter moving forward?

The answer is Single Touch Payroll. Since July 2019, every Australian employer is obligated to report pay activity to the ATO on a pay cycle basis. The ATO now has almost real-time information on who is being employed and actively paid in Australia. And here comes the kicker: they share this data under the Data Matching arrangements with other government agencies. This specifically includes the Department of Home Affairs.

Whereas historically Home Affairs has been a poorly resourced enforcement agency, relying on anonymous tip offs to perform “raids” dressed up as audits. STP and the data sharing arrangements with the ATO, now gives them near real-time data on who is being employed and paid in Australia. They simply cross match this data to who has the legal Right To Work and whammy, you have automated audits and targeted compliance!

The Fines & Reputational Risk

Whilst the fines to Employers, Directors and Officers under the strict liability system are hefty (and outlined here), the biggest risk to Australian business is that of reputation:

Warren Buffet could have been talking about Right To Work compliance when he spoke about reputation

The Australian media has become part of the enforcement arm of the Department of Home Affairs, with populist views on “illegal workers” creating a media hungry for stories of non-compliance. The Department of Home Affairs publishes its prosecutions to a web-page and this is monitored by reporters keen to break the story.

Compliance Options

There is essentially three options for compliance:

  1. DIY manual – keep good records and manually perform the Right To Work checks by citing the necessary documents, and in the case of non-citizens, performing a manual VEVO check at the time of recruitment and at “reasonable times” throughout their employment.
  2. Software automation – use software like vSure’s Enterprise Solution to embed/integrate a seamless process into your onboarding and to provide automated monitoring.
  3. Outsource – companies like CV Check,, Equifax and more offer solutions for Right To Work screening pre-employment and beyond.

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    Matt Paff (BBus GAICD) is founder of Value Adders and a veteran of the Accounting, Payroll and broader B2B Technology industry. Matt’s resume includes time as GM at Attaché Software, one of the world’s longest surviving accounting software companies, as well as starting, growing and exiting a successful accounting technology & business process consulting firm. Matt has held advisory board positions with accounting firm Imagine Accounting as well as Governance technology start-up GovernRight. In his spare time, Matt also runs a RegTech start-up vSure. Matt is passionate about a practical, plain English perspective. He is known for being a straight-shooter and appreciated for his forthright, researched opinions.

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