When it comes to buying or selling an establishment in the hospitality industry, publicans and hoteliers must navigate a web of legal and regulatory requirements. One critical area often overlooked is immigration law. Understanding these considerations can ensure compliance and smooth operations during the acquisition or sale process.
Overview of Immigration Law Considerations
Immigration law intersects with hospitality transactions in several key ways, particularly when it comes to workforce management.
Due to workforce shortages, the hospitality sector relies on a diverse workforce that includes visa holders, from temporary skilled workers to international students and backpackers.
Below are the primary immigration law considerations to keep in mind for buyers and sellers:
- Understanding Employer Sponsorship Obligations
Whether you’re acquiring or selling a venue that employs visa holders, it’s vital to understand your obligations. Key considerations include:
- For Sellers: If the establishment employs staff on employer-sponsored visas (e.g. the Temporary Skill Shortage (TSS) or Skills in Demand (SID) (Subclass 482) visa), then sellers must ensure they comply with sponsorship obligations up until the sale is finalised. This includes record-keeping, providing accurate employee details, and notifying the Department of Home Affairs of any changes to the employment of sponsored employees.
- For Buyers: Buyers should conduct due diligence to identify whether the business employs visa holders and understand whether they will inherit any associated sponsorship obligations (to ensure the business remains compliant with any such obligations), if existing sponsorship arrangements need to be transferred, or if they need to apply to become an approved sponsor to continue employing certain visa holders.
- Workforce Composition and Visa Status
Publicans and hoteliers must review the visa status of employees during the due diligence phase, including:
- Visa Verification: Buyers need to conduct VEVO (Visa Entitlement Verification Online) checks to confirm the working rights of any employees who hold a visa. This important step provides buyers with an opportunity to ensure they’re aware of (and properly understand) any work limitations and/or conditions of visaed employees, and mitigates the risk associated with employing individuals without suitable work rights, rostering employees to work beyond the hours allowed by their visa (such as for international students), or unknowingly requiring visa holders to work outside of alignment with their approved roles.
- Transfer of Sponsored Employees: Employees on employer-sponsored visas may need to transfer their sponsorship to the new owner of the business. This process requires careful planning and communication to avoid disruption to operations or the visa holder’s employment status.
- Future Recruitment Needs
- Buyers should consider their future workforce strategy and whether they will benefit from skilled migration programs, as planning ahead can help in securing the talent necessary for the business to operate successfully.
- Penalties for Non-Compliance
- Non-compliance with immigration laws can result in significant penalties, including fines and restrictions on hiring visa holders in the future, so it’s in the interests of both buyers and sellers to prioritise compliance as part of their transaction checklist.
Hospitality transactions can be complex – by being aware of the immigration law considerations, you will be empowered to make informed decisions when working with your legal experts to ensure compliance across all aspects of the sale or acquisition process for a seamless transaction.
If you are looking to acquire or sell a hospitality venue, then please reach out to our team at Mullins for tailored legal advice – our Migration and Hospitality teams are here to guide you every step of the way to ensure a seamless and compliant process.
This article is written by Migration Partner, Corina Chen and Hospitality Partner, Curt Schatz.