Can an employer sponsor a contractor or subcontractor on a 482? The employee requirement, and converting the engagement

MARN 1576536

What the nomination requires

The nomination criteria for the 482 require, among other things, that the nominee will be employed by the sponsor, or by an associated entity of the sponsor, in the nominated position, under a written contract of employment, unless the nomination is made under a labour agreement that provides otherwise. The 494 has the same requirement with the regional position. The contract of employment is attached to the nomination, and the Department reads it for the position, the salary, the hours, the duration and the terms, and compares it with the market salary evidence and the labour market testing. The requirement is not a formality: it is the foundation of the sponsorship obligations, every one of which assumes an employer paying a salary to an employee. The sponsorship guide sets out the sponsor's side.

Why a contractor cannot be nominated

An independent contractor is engaged under a contract for services, works for their own business, controls their own hours and methods, bears their own risk, can work for others, and invoices for results; an employee works under a contract of service, for the employer, under its direction, for wages. The migration programme needs the second: the sponsor must pay the nominated salary and the market rate, which means a salary; must provide terms no less favourable than an Australian employee's, which means employment terms; must notify the Department when the employment ends, which means an employment to end; and the visa holder must work for the sponsor under condition 8607, which a contractor serving several clients does not. A nomination that attaches a contractor agreement, or an employment contract that in substance describes a contractor, is refused on the employment criterion and often on genuineness too. The label does not decide it; the Department reads the substance, as the Fair Work Act does.

Converting a contractor to an employee

The conversion is an ordinary employment decision: the business offers the person a position as an employee, full-time, in the occupation, at a salary at or above the annual market rate and the threshold, with superannuation on top, paid leave, tax withheld, workers compensation cover and the award or agreement terms that apply; the person accepts, the contractor arrangement ends, and the person is placed on the payroll. The contract of employment is the document the nomination attaches, and the position description in it is the one the genuine position statement explains. For a person already on a visa with work rights the conversion happens at once and the payslips begin; for a person overseas the contract is signed in anticipation of the visa, with the start date conditional on grant. The business's accountant handles the payroll side and the migration adviser the nomination; both read the same contract. The genuine position guide covers the description.

What it costs the business

A business that paid a contractor a day rate now pays a salary, superannuation at the guarantee rate, annual and personal leave, public holidays, workers compensation premiums, payroll tax where the business is over the threshold, and the administrative load of an employee, and the salary must meet the market rate for the occupation, which for many trades and professions is above what a contractor's day rate annualised to. It also takes on the sponsorship obligations and the levy. The comparison is made honestly before the business decides, because a business that converts a contractor to an employee at a salary it cannot sustain is a business that will breach the obligation to pay it, and the worker's permanent visa depends on the salary being paid for years. The underpayment guide sets out what happens when it is not.

Sole traders, partnerships and trusts

A standard business sponsor must be a lawfully operating business, and the business can be a company, a sole trader, a partnership or a trust with a trustee; each can be approved and each can employ and nominate workers. The limit is that a business cannot employ its own principal: a sole trader cannot be their own employee, a partner cannot be employed by the partnership of which they are a partner in most structures, and a trust's beneficiary who runs the business is examined for whether the employment is real. A person who wants to be sponsored by a business they own incorporates a company, which can employ its director, and the nomination is then a self-sponsorship with the scrutiny that attracts. The self-sponsorship guide sets out that structure.

Labour hire and the on-hire agreement

A labour hire business employs workers and places them with clients, who direct the work; the worker is employed by the labour hire business and not by the client. The client cannot sponsor the worker, because it does not employ them. The labour hire business cannot sponsor under a standard business sponsorship either, because a 482 holder must work for the sponsor or an associated entity and not be on-hired to an unrelated client. The route is the on-hire labour agreement, a template agreement the Department enters with labour hire businesses that meet its terms, under which the business sponsors workers in listed occupations and places them with clients, with obligations about the placements and the terms. A business that is in substance a labour hire operation nominating under a standard sponsorship, with the worker placed at a client's site, is refused. The on-hire agreement guide sets out the agreement.

The trades and construction

Construction runs on subcontracting, and a builder who wants to sponsor the tiler, the electrician or the carpenter who has worked on every job for two years has to employ them, which changes a relationship the industry structures the other way. The builder becomes the employer, pays the salary through the quiet months as well as the busy ones, provides the leave, and carries the obligations; the worker gives up the ABN, the other clients and the day rate for a salary and a visa. Many builders decide it is worth it for a tradesperson they cannot replace, and the nomination describes the employed position, the sites, the supervision and the salary against the award and the market, with the licensing position for the trade set out alongside. A subcontractor further down the chain, engaged by a subcontractor rather than the builder, is sponsored by whoever employs them, and the chain is examined for who that is. The construction sponsorship guide covers the trades.

A contractor already working for you

A contractor on a visa that allows work, a 485, a working holiday visa, a partner visa or a student visa inside the hours, can be converted to employment immediately, and should be, so that the nomination describes a position the person already fills and the payslips show the salary being paid; a nomination lodged for a position the person has filled as an employee for three months is stronger than one for a position that exists on paper. A contractor on a visa that does not allow work for your business, a primary 482 holder sponsored by someone else, or a visitor, cannot be engaged in any form until the visa permits it, and a business that has been using such a person as a contractor has a problem of its own, because the engagement was a breach of the worker's conditions and the business's obligations as an employer of visa holders. The worker's own ABN, held while on a visa that confines them to a sponsor, is a condition breach the worker carries into the new application. The business-on-a-visa guide explains which visas allow contracting.

The sequence

1. Confirm the person's current visa and whether it allows work for your business at all.
2. Decide, with the accountant, whether the business can sustain the position as employment at the market rate.
3. Convert: employment contract, payroll, superannuation, insurance, from a date.
4. Lodge the sponsorship if the business is not yet a sponsor, and run the labour market testing for the position.
5. Lodge the nomination with the employment contract, the position description, the salary evidence and the testing.
6. Lodge the visa, and keep the payslips from the conversion date for the permanent application.

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General information only, current at October 2026; not advice on your own case. Regulations 2.59 and 2.72 of the Migration Regulations 1994 (sponsor and nomination criteria, including the requirement of direct employment under a written contract), condition 8607 in Schedule 8, Division 2.19 (sponsorship obligations), and the employee and contractor provisions of the Fair Work Act 2009, as in force at the date above. Employment-law classification is a matter for an employment lawyer or the Fair Work Ombudsman; WIDEN advises on the migration side. Outcomes depend on the Department’s assessment of each nomination; no registered migration agent can guarantee a result (Code of Conduct, Migration Agents Regulations). Keshab Chapagain, MARN 1576536.