The Parliament of Australia has published a Q&A guide regarding the subclass 457 visa. The post is reproduced here in full, but can be found at its original source here.

The subclass 457 visa: a quick guide

11 November 2013

PDF version [313KB]

Gareth Larsen Social Policy

The Temporary Work (Skilled) visa
, or ‘subclass 457 visa’, allows skilled persons to come to Australia to work for an approved employer, accompanied by their immediate families, for a period of between one day and four years.

The uncapped program is driven by employer demand, and built on the premise that it does not undermine job opportunities for Australians. It allows employers to access overseas workers where a genuine skill shortage exists or, in effect, where a suitably qualified Australian worker is not available.

The program involves a three-stage process whereby an employer applies to become an approved sponsor and then nominates a skilled overseas worker to fill a specific position. The skilled overseas worker completes the process by lodging a linked temporary work skilled visa application.

The subclass 457 is the most commonly used program to sponsor overseas workers on a temporary basis.

This guide provides an overview of the program to assist enquiries into the role of employers and visa holders, and some of the broader considerations in the program. Links to information sources are provided throughout the quick guide and in the final section ‘Need to know more?’



Which employers can use the program?

Employers lawfully operating a business inside or outside of Australia can use the program once they have been approved by the Department of Immigration and Border Protection (DIBP) as a ‘Standard Business Sponsor’.

To qualify, businesses in Australia provide an application and fee
(the amount is revised on 1 July each year) and demonstrate they are operating as a lawful business. The firm is required to demonstrate or meet minimum training benchmarks based on the length of time that the firm has traded (under or over 12 months). Firms must also attest in writing to a record or commitment to the employment of local labour and a commitment to non-discriminatory recruitment practices.

A standard business sponsorship is valid for three years. Employers can be accredited for up to six years before needing to re-apply as a sponsor.

Overseas employers can also use the program if they are operating legally and actively seeking to establish a business operation on Australia. Whilst overseas firms would not need to demonstrate the same training commitments, their initial sponsorship term is limited to 12 months in which time they would be expected to make headway towards Australian operations.

If DIBP knows of adverse information about the business sponsor, or those associated with the business, then the Department has discretionary power to refuse sponsorship arrangements.

What are employers obliged to do under the scheme?

Businesses must make a commitment to meet the prescribed training benchmarks for the program, which require an ongoing commitment to training activities for Australian citizens and permanent residents, and that at least 75 per cent
of their workforce are Australian residents or citizens. Employers must attest to having a strong record of, or commitment to, employing local labour and non-discriminatory employment practices. Employers must pay employees a rate equivalent to comparable local wages, and must not underpay their employees or deduct money without the employee’s consent for such purposes as rent or board. Employers must also provide a clear understanding of the skills and experience required for the position, and identify where the employee will be working.

How is the rate of pay determined?

As at 1 July 2013, the lowest wage acceptable under the scheme, known as the Temporary Skilled Migration Income Threshold
(TSMIT) is $53,900, in order to best ensure that all subclass 457 visa holders have sufficient income to independently provide for themselves in Australia. TSMIT is indexed in line with the Australian Bureau of Statistics (ABS) report on average weekly earnings. For each occupation, employers are required to show that they are providing equal pay and conditions of employment as for Australian workers performing equivalent work in the same location, known as the market salary rate. This process may involve employers identifying relevant collective agreements, awards and award conditions, common law contracts, remuneration surveys or earnings data.

Employers are not allowed to make deductions
from workers’ pay (other than for tax and superannuation) without the worker’s permission.

Employers remunerating positions in excess of $250,000 are exempt from market salary testing.

Why is the training of Australians an important consideration?

DIBP emphasises that ‘the Temporary Work Visa is designed to enable employers to address labour shortages by bringing in genuinely skilled workers where they cannot find an appropriately skilled Australian worker’. To reduce the longer term dependence on overseas workers, employers must show a willingness to train Australians in accordance with legislation.

Training of Australians is not always possible in regional, remote or low population growth areas, simply because the local residents are either not interested or not available. Over recent years, the number of Regional Skilled Migration Scheme (RSMS) places in the skilled permanent program has increased to provide a more permanent solution in areas outside major metropolitan centres facing this dilemma.

Who monitors potential exploitation of workers?

In response to a number of concerns regarding potential exploitation, Fair Work Australia is now empowered to monitor compliance with the sponsorship obligations to ensure workers are in their nominated occupation and being paid market salary rates. Any suspicious activity is referred to DIBP for investigation.

Possible courses of action for an employer’s failure to comply with sponsorship obligations include: being barred from future sponsorship arrangements; cancellation of sponsor approvals; civil penalties up to $51,000; and infringement notices for each failure, attracting penalties of up to $10,200.

The Government may reward good behaviour of sponsors with accredited status, under which sponsorship arrangements can be extended to the maximum duration of six years.

What obligations do employers have when subclass 457 visa holders leave Australia?

Subclass 457 visa holders are entitled to receive from their sponsor reasonable and necessary travel costs
to enable them and their family members to leave Australia, providing it is requested in writing by the sponsored worker, their family or DIBP. This may be negated if the visa holder changes employers or is granted a further visa.

Sponsors must provide DIBP with information regarding subclass 457 visa holders’ stays, and are liable to pay costs associated withlocating and/or removal from Australia if sponsored visa holders become unlawful.

Can employers seek workers in occupations which are not listed on the Skilled Occupations Lists?

Yes. Labour agreements
allow for the recruitment of an agreed number of temporary business and other skilled visa holders. They are commonly used for occupations that are not on the list of approved occupations for the subclass 457 visa where a ‘genuine skills shortage exists’. Labour agreement templates exist for the labour-hire, meat processing, tourism and hospitality (including fast food) sectors, where a complexity of occupations, conditions and safety concerns may be addressed in detail. About three per cent of all subclass 457 visas are granted under labour agreements. As at June 2013, there were 162 labour agreements in effect and a further 71 under negotiation.

Enterprise Migration Agreements (EMAs)

EMAs take a project-wide approach to meeting the skill needs of the resources sector and allow certain concessions to English-language proficiency and skill level requirements. EMAs are only available to resource projects with capital expenditure in excess of $2 billion and a peak workforce of more than 1,500 workers. The first EMA centred on Roy Hill—a project in the Pilbara region of Western Australia (WA).

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