| The Australian Department of Immigration has | | | | outside the usual list, but this concession has now been |
| introduced a number of changes to the sponsorship | | | | eliminated. |
| regime for temporary workers in Australia on subclass | | | | Market Rate Salaries |
| 457 visas. These changes come into effect on 14 | | | | From 14 September 2009, new 457 visa applicants |
| September 2009 and involve the following: | | | | must be paid at the "market rate". The market rate will |
| - New criteria for approval as a business sponsor, | | | | depend on the occupation and location of the |
| including a training benchmark | | | | employee. Evidence must be provided by the |
| - Complete revision of the sponsorship obligations of | | | | employer as to what the market rate is for the |
| employers using the 457 program as well as sanctions | | | | occupation, unless the base salary is over $180,000. |
| for breach of obligations | | | | This replaces the previous system which allowed for |
| - New list of approved occupations for 457 visas, | | | | grant of a 457 visa providing the salary level was |
| along with new legislation for approval of nomination | | | | above a clearly specified minimum for the occupation. |
| - Introduction of market rate salary levels for 457 visas | | | | For existing 457 visa holders, employers have until 1 |
| - Removal of employers' obligation to pay health costs | | | | January 2010 to ensure that they are being paid the |
| for new 457 visas, and requiring 457 holders to have | | | | market rate. This will require an extensive audit |
| private health insurance | | | | process for larger users of the 457 program. |
| - Changes to the 8107 work restriction on 457 visas | | | | The intention of the change is to ensure that 457 visa |
| and allowing 457 holders to "transfer" to a new | | | | holders are paid in accordance with Australian |
| sponsor without applying for a new 457 visa | | | | standards. The stated intention is to avoid exploitation |
| Sponsorship Approval | | | | of overseas workers. In reality, the change seems to |
| The Department of Immigration is seeking to streamline | | | | be in response to concerns that workers on 457 visas |
| the approval process for employers seeking to | | | | put downward pressure on Australian wages and |
| sponsor employees under the 457 program. As a | | | | salaries. |
| result, the requirements for approval as a business | | | | Health Costs and Insurance for 457 Holders |
| sponsor have been completely re-written. | | | | Employers who have employees on 457 visas which |
| Training Benchmark | | | | were granted prior to 14 September 2009 are |
| Businesses have two options in meeting the training | | | | expected to cover costs of public hospital treatment |
| benchmark: | | | | of the 457 visa holders. |
| | | | The health obligation is no longer part of the |
| 1. Payment to an industry training fund of at least 2% | | | | sponsorship obligations for 457 visas granted after 14 |
| of payroll; or | | | | September 2009. Instead, employees must show that |
| 2. Expenditure of at least 1% of payroll on training of | | | | they have adequate medical insurance to be granted |
| employees. It was previously possible for a business to | | | | their 457 visa, and must maintain this insurance during |
| show that they were introducing or utilizing in Australia | | | | their stay in Australia on their 457 visa. |
| new technology as an alternative to demonstrating | | | | Employers previously had significant exposure to |
| training, but this no longer appears to be possible. | | | | potentially very high health costs under the previous |
| Benefit to Australia | | | | sponsorship obligation regime. Requiring the employee |
| The "benefit to Australia" requirement which previously | | | | to hold suitable insurance is a more sensible way to |
| applied to sponsorship approvals is no longer required. | | | | offset the risk. |
| Employers previously needed to show that | | | | However, requirement that the insurance be already in |
| employment of a person on a 457 contributed to | | | | place prior to visa grant could be rather troublesome. |
| employment of Australians, trade in goods & | | | | Many applicants would need to pay for health |
| services, competitiveness of an Australian business | | | | insurance without being sure that their 457 visa will be |
| sector or links with international markets. | | | | granted. |
| Employment of Local Labor and Non-Discriminatory | | | | Sponsorship Obligations |
| Employment Practices | | | | A new regime of sponsorship obligations has been |
| Employers are now required to provide an attestation | | | | introduced. The most significant changes include: |
| that they have a strong record or demonstrated | | | | - Elimination of health obligation for 457 visas granted |
| commitment to employing local labor and | | | | after 14 September 2009 |
| non-discriminatory employment practices. This | | | | - Changes to the events which must be notified to the |
| presumably means that it may be more difficult for | | | | Department of Immigration, as well as the time-frame |
| employers who have a large number of 457 holders | | | | (10 business days) and method of notification |
| to sponsor further applications. The emphasis on | | | | - Clarification of the obligation to return 457 holders and |
| non-discriminatory employment practices might result in | | | | family members to their home country |
| issues for employers preferentially hiring overseas | | | | - Requiring the employer to maintain certain records |
| nationals or paying lower salaries to overseas | | | | for a period of 2 years |
| workers. | | | | - Forbidding employers from recovering the cost of |
| Nomination Requirements | | | | obtaining sponsorship approval and recruitment fees |
| The legislation for approval of 457 nominations has | | | | from the sponsored employee Work Restriction 8107 |
| also been completely revised. | | | | and Changing Employers for 457 holders |
| The occupation the employee is to work in must in | | | | 457 holders are now able to change employers |
| general be on the list of approved occupations for 457 | | | | without needing to apply for a new 457 visa. The |
| visas. The employer must now certify that the duties | | | | process of doing this is for the new employer to lodge |
| of the position match the ASCO definition of the | | | | a nomination and once this is approved, the 457 holder |
| occupation and that the qualifications and experience | | | | can work for the new employer. The work restriction |
| of the applicant meet the skill level specified in the | | | | on 457 visas, condition 8107, has been rewritten to |
| definition. | | | | reflect this change. 457 holders can only work for the |
| A revised 457 occupations list has been produced on | | | | employer who most recently nominated them. If a 457 |
| 11 September 2009. A number of "not elsewhere | | | | holder ceases employment, they must start working |
| classified" occupations have been eliminated. These | | | | again within 28 days otherwise they will be in breach |
| are occupations where the tasks and duties are not | | | | of their visa conditions. |
| specified by ASCO, and are considered "catch all" | | | | Conclusion |
| occupations. An attempt has been made to narrow | | | | Probably the most significant of the changes is the |
| the "not elsewhere classified" occupations still on the | | | | requirement to pay 457 employees at the market rate. |
| list by including definitions and a list of allowed | | | | In most cases, the market rate will be much higher |
| specializations. This has also been done for butchers | | | | than the Minimum Salary Level which applied prior to 14 |
| and project/program administrators. | | | | September. |
| Another category targeted for elimination are | | | | Whilst some guidance has been provided on |
| occupations in the meat industry - an area where | | | | determining market rate, this requirement is very |
| employment of 457 visa holders has been of concern | | | | subjective and is likely to result in signifcant delays for |
| to unions for some time. | | | | employers using the 457 program going forward. |
| Farmers and farm overseers have been added to the | | | | Changes to the sponsorship obligations are mostly |
| approved list of 457 occupations. | | | | quite sensible and make the requirements more easy |
| Another interesting addition is that the legislation has a | | | | to determine. |
| provision to require employers to seek the support of | | | | The training benchmark will be very difficult for |
| certain organizations for a nomination to be approved | | | | employers to meet if they rely mainly on "on the job" |
| in certain occupations. Presumably, this would include | | | | training. |
| occupations where labour unions had concerns about | | | | Employers must now in general show payments to |
| presence of overseas workers in Australia. | | | | external training providers or that they have hired a |
| The only way to nominate employees who are not | | | | training officer to meet the training requirement. |
| the approved list is to negotiate a "labor agreement" | | | | High-tech companies which would have previously |
| with the Department of Immigration and the | | | | relied on the introduction or utilization in Australia of |
| Department of Employment and Workplace relations. | | | | new technology will be disadvantaged. |
| This process can take many months and the | | | | Changes to the work conditions on 457 visas are very |
| agreement can be quite restrictive in terms of which | | | | much in favor of 457 holders, as they make it easier |
| occupations can be nominated, salary level and training | | | | to transfer to a new employer without applying for a |
| undertakings. Previously, it was possible for employers | | | | new 457 visa. |
| operating in regional areas to nominate occupations | | | | |