“I’m from the Government and I’m here to help you” or is that “I’m from the Government, and I know all about you”?
We’ve all heard about how the Tax Office data-matches and data-mines information to ensure compliance with the tax laws. This has become very extensive and shows no signs of stopping.
However, the process works in other ways as well. It’s not a one-way information street into the Tax Office. The Tax Office itself shares some of its data with other agencies to help compliance with laws they administer.
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The latest example of this relates to new laws to protect the rights of temporary overseas workers which came into effect on 14 September 2009. Temporary overseas workers under Subclass 457 visas can provide SMEs with a short-term fix to a particular employment need. With this visa, an SME can employ overseas workers for a period of between one day and four years. These visas are for employers who would like to employ overseas workers to fill nominated skilled positions in Australia.
A key provision in the new laws will enable the Tax Office to disclose information to the Department of Immigration and Citizenship in order to ensure correct salary levels are being paid to visa holders. What a wonderful inter-connected world we live in!
In addition, information will be able to be shared with other enforcement bodies including the Fair Work Ombudsman and occupational health and safety agencies.
While the correct salary and tax checks are one offshoot of the new laws, the Government says they are also designed to help ensure Australian wages and conditions are not being undermined.
In one such incident earlier this year, the Minister for Immigration, Senator Evans, said the Department of Immigration and Citizenship and the Fair Work Ombudsman were able to recover more than $8,000 in back-pay owed to two overseas workers employed in the WA Goldfields on Subclass 457 visas.
On another occasion in 2008, three Filipino nursing assistants on Subclass 457 visas were underpaid by more than $15,000 by a healthcare recruiting agency. The company was subsequently fined $48,000.
The sharing of information among the Dept of Immigration and Citizenship, the ATO, Fair Work Ombudsman and occupational health and safety agencies is intended by the Government to act as an effective deterrent to rogue employers and to ensure that instances of unfair or unsafe treatment of temporary skilled workers are dealt with appropriately.
The laws will require that all new workers on Subclass 457 visas must be paid market salary rates from 14 September 2009. Employers currently paying less than the market salary rate to existing Subclass 457 visa holders employed in Australia will have until 1 January 2010 to commence paying market rates.
The new laws will also enable specially trained Department of Immigration and Citizenship officers with investigative powers to monitor workplaces and conduct site visits to determine whether employers are complying with the redefined sponsorship obligations. The powers will be similar to the powers of Fair Work inspectors under the Fair Work Act 2009.
Employers found in breach of the obligations in the Migration Regulations may be liable for fines of up to $33,000. The Department will retain the ability to cancel an employer’s approval as a sponsor or bar them from making applications for approval as a sponsor for a period of time.
So, the Government’s package of Subclass 457 reforms has a multiple sting for those not complying with the law, and tax is but one aspect of that.
Terry Hayes is the senior tax writer at Thomson Reuters, a leading Australian provider of tax, accounting and legal information solutions.