1. What to do if my employer failed to meet 1% training requirement?

(mostly for
TRT pathway where employers need to meet training for EACH year since gra
nt of 457)

Employer still has Option #1 which is to donate 2% of the payroll

ARTICLE OUTLINE

Working Title: TRAINING BENCHMARKS A & B: How Employers Can Meet the
Training Requirements for Sponsorship

BODY/DRAFT:

Question: What should an employer do if it failed to meet the 1% training requirement

under the Temporary Residence Transition pathway?

1. Last June 23, 2017, the Minister for Immigration and Border Protection Peter
Dutton released “Migration (IMMI 17/045: Specification of Training Benchmarks
and Training Requirements) Instrument 2017”.

2. The purpose of this legislative instrument is to clarify the policies on training

requirements that employers must meet in order to successfully sponsor an
applicant. The instrument also sought to address integrity concerns by changing
the acceptable types of training expenditures.

3. Basically a TRAINING REQUIREMENT, true to its name, refers to an employer’s

obligation to train employees who are Australian citizens or permanent
residents. Before an employer can nominate and sponsor an employee, this
requirement should be met.

4. The training requirement also depends on whether or not you are a newly-
established business. If you have been operating for less than 12 months, then
you must prove that you have a genuine commitment to training. You must be
able to show evidence of an Auditable Training Plan which you can get from
training organizations and educational institutions such as TAFE. You also have
the option of creating your own training plan.

5. The Auditable Training Plan must show the following:

 a. Your forecast payroll for the next 12 months
b. Your intended expenses for either Training Benchmark A or Training
Benchmark B; and
c. How you will implement the plan;

6. On the other hand, if you have been operating for 12 months or more, you
should be able to prove that you have an existing training record. You must
show that you have spent for training during the previous or within the current
financial year.

7. These training expenditures are more technically referred to as TRAINING

BENCHMARKS.

8. There are two: Training Benchmark A and Training Benchmark B.

9. In practice, employers normally opt for Training Benchmark B.

10. What is Training Benchmark B? These are training expenditures equivalent to at

least one percent (1%) of the payroll of the business.

11. Payroll simply means the total amount an employer pays to its employees and
contractors as wages and salaries. Otherwise, it shall refer to the total value of the
director’s salaries or the actual profit of the business.

12. So, as required by Training Benchmark B, an employer should spend 1% of its

payroll for the training of its employees. Expenditures must be recent ---
meaning, they were made in the last 12 months.

13. Proof of these training expenses can be RECEIPTS or EMPLOYMENT

CONTRACTS of the relevant individual.

14. Not all expenses for training are acceptable. Below is a list of approved training
expenditures that will allow you to meet Training Benchmark B: (please take note
that the below content is copy-pasted from the legislative instrument, with only a few
rewordings; please advise):

a) payments for Australian employees to undertake a formal course of

study, including any reasonable and necessary associated costs (for
example, costs of travelling to the training venue or access an online
training programme); 

 b) payments to RTOs to deliver face-to-face training to Australian
employees that will contribute to an Australian Qualifications Framework
qualification; 


c) purchase of an eLearning platform or standalone training software; 


d) payments to cover the salary of Australian employees: 


who are engaged by the business as apprentices or trainees

under a formal training contract, or

who have completed an undergraduate or higher degree in a

university within the last 2 years, and
 are participating in a formal,
structured graduate program for up to 2 years, or completing a
professional year following their graduation;

e) the salary of a person whose sole role is to provide training to Australian


 employees; 


f) expenditure to attend conferences for continuing professional development. 


15. The following have recently been announced as unacceptable and cannot count
towards meeting Training Benchmark B (please take note that the below content is copy-
pasted from the legislative instrument, with only a few rewordings; please advise):

. (a) on the job training that is not otherwise identified as applicable expenditure for
Training Benchmark B; 


. (b) training that is not relevant to the industry in which the business operates; 


. (c) training undertaken by persons who are principals in the business or their family
members; 


. (d) training that has a very low skill level having regard to the characteristics and

 size of the business; 


. (e) induction training; 


. (f) staff salaries apportioned to time spent undertaking online or other training
 courses; 


. (g) purchase of software for use in normal duties; 


. (h) membership fees; 


. (i) purchase of books, journals or magazine subscriptions; 


. (j) attending conferences for purposes other than continuing professional


 development; and 


. (k) hiring a booth at a trades show, conference or expo. 


16. As mentioned earlier, most employers prefer Training Benchmark B. However, if

they fail to meet this requirement, they still have the option of meeting Training
Benchmark A.

17. Under Training Benchmark A, the employer is required to allocate at least two
percent (2%) of its payroll to a training fund. This must be evidenced by a RECEIPT for
the payment or a LETTER from the fund where the donation was made.

18. The Training fund MUST operate in the same industry or at least related to the
business.

19. Similar to Training Benchmark B, the training expenditures must be recent:

meaning, made in the last 12 months. You can make donations to the following: (please
take note that the below content is copy-pasted from the legislative instrument, with only a few
rewordings; please advise):

. (a) an industry training fund: that is, a statutory authority responsible for providing
funding for training of eligible workers in certain industries; 


. (b) a fund managed by a recognised industry body that provides training

opportunities in their industry and quarantines contributions to the fund for
training purposes only; or 


. (c) a recognised scholarship fund operated by an Australian university or TAFE

college only. 

20. Basically, for as long as the training fund is related to the business of the employer
or at least operates in the same industry then the 2% allocation is acceptable. However,
the recent legislative instrument has clarified that there are expenditures which are no
longer acceptable.

21. Below are the training expenditures that are no longer acceptable for purposes of
meeting Training Benchmark A (please take note that the below content is copy-pasted from
the legislative instrument, with only a few rewordings; please advise):

(a) training funds operated by Registered Training Organisations (RTOs) or

private individuals; or

(b) funds that allocate a percentage or part of the contributions received to

commissions or offer refunds for failed immigration applications.

22) In summary, the training requirements vary depending on what type of business
you are. If you are a newly-established entity, then all that you have to submit is an
Auditable Training Plan that proves your genuine commitment to training.

23). On the other hand, if you have been operating for 12 months or more, then you
have two options to meet the training requirement: Benchmark A (2% of the payroll)
and B (1% of the payroll). You may choose to meet either of two benchmarks. And if
you fail to meet one, you can take the alternative route and try to meet the other
benchmark.