What Is the Direct Control Requirement?

When an approved sponsor nominates a worker for a Subclass 482 (Temporary Skill Shortage) or Subclass 494 (Skilled Employer Sponsored Regional) visa, the Department of Home Affairs requires clear evidence of a genuine employer-employee relationship between the sponsor and the nominee.

For most employers, this is straightforward. However, sponsors engaged in on-hire business activities face additional scrutiny. In an on-hire arrangement, the sponsor employs the worker but deploys that worker to perform duties at a third-party host employer's site. This structure can obscure who actually controls the employment, which is precisely what the Department examines.

Why On-Hire Sponsors Are Treated Differently

The concern is that an on-hire sponsor may function more as a labour intermediary than a true employer. If the host business directs the day-to-day work, sets performance standards, and manages leave and conduct, the question arises: who is the real employer?

Australian migration law requires that the approved sponsor retain direct control over the visa holder's employment conditions, tasks, and performance management. Where that control rests substantially with the host business, the nomination may not satisfy the legislative requirements under the Migration Regulations 1994.

What the Employment Contract Must Demonstrate

According to guidance published in MIA Notice 64 (released 12 June 2026), the employment contract submitted with a nomination must clearly outline the sponsor's direct control over the visa applicant's employment. A contract that merely states the worker will be deployed to client sites is unlikely to be sufficient.

The contract should address the following elements:

1. Who sets the terms of work: Hours, duties, and location should be defined by the sponsor, not the host business.
2. Who manages performance: The sponsor, not the host client, should be responsible for performance reviews, disciplinary action, and termination decisions.
3. Who controls remuneration: The sponsor must be the entity paying the worker's salary and determining any variations to pay.
4. Supervision and reporting lines: The contract should identify a supervisor or manager employed by the sponsor who holds responsibility for the worker's day-to-day oversight.
5. Variation and redeployment: Any redeployment to a different host site should require the sponsor's written authority, not the host's unilateral direction.

What Counts as Sufficient Evidence

A detailed employment contract is the primary document. It should be specific, not generic. Boilerplate contracts that do not address the on-hire context are a common reason for nomination refusals.

Supplementary evidence may include internal organisational charts showing where the visa holder sits within the sponsor's structure, policies governing performance management, and correspondence demonstrating the sponsor's active oversight of the worker's placement.

Practical Steps for On-Hire Sponsors

1. Review your standard employment contract template before lodging any nomination. Confirm it addresses direct control in the on-hire context.
2. If your contract was drafted without migration compliance in mind, seek legal advice before submission. A deficient contract is difficult to remedy after a nomination is refused.
3. Do not rely solely on a letter of offer. The Department expects a full employment contract with specific terms, not a summary document.
4. Where a host business agreement exists between your firm and the client site, ensure the terms of that agreement do not contradict the employment contract you submit with the nomination.
5. Keep records of supervisor communications, performance reviews, and payroll records that demonstrate ongoing direct control throughout the visa holder's employment.

Key Takeaways

• On-hire sponsors must demonstrate that the approved sponsor, not the host business, holds direct control over the visa applicant's employment.
• A detailed, on-hire-specific employment contract is the primary evidence required at nomination stage.
• The contract must address who sets duties, manages performance, controls pay, and supervises the worker on a day-to-day basis.
• Generic or boilerplate contracts are a common cause of nomination refusal in on-hire cases.
• Legal review of your contract before lodgement is the most effective way to reduce refusal risk.

The content of this article is intended for general informational purposes only and does not constitute legal advice. Immigration law is complex and subject to change. The information provided may not reflect the most current legal developments. For advice specific to your circumstances, please consult a registered Australian migration lawyer. For full terms governing use of this website and its content, please refer to our Website Terms and Conditions.

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