The 457 temporary skilled worker program is an program to allow local businesses (and in some cases overseas companies with local offices,) the opportunity to source and engage overseas skilled staff (from outside Australia or at times inside Australia if on qualifying visas), to work in their businesses where there are existing and increasing skill shortages in identified occupations. It is equally available to employers both in metropolitan and regional areas. The video below is provided courtesy of DIAC.
Why use the 457 visa program?
The program is a 3 stage procedure for new sponsors;
- Firstly the company must be approved as a Standard Business Sponsor (SBS) by showing that it is lawfully operating, has the capacity to sponsor and that it meets critical criteria including a commitment towards training local staff including a 1% of payroll spend requirement per year (see training benchmarks);
- Secondly the employer must nominate the ANZSCO position (unlimited) from the new Consolidated Skilled Occupation List ( CSOL)- Schedule 1 & 2, the nominee, pay market salary, and identify skills and responsibilities of the position; and
- The last stage is to ‘match’ the 457 visa applicant’s skills with the nominated ANZSCO occupation (the job title is often different from the nominated occupation).
After SBS approval
Once a company has been approved to sponsor, it can nominate new candidates for the life of its sponsorship – usually 3 years. After successful approval of the sponsorship, the usual procedure is; nomination of position and visa approval (normally processed together) for visa periods up to 4 years, unless the nominee already has a 457 visa. If so, only a nomination will be required for the balance of the existing 457 visa.
1 July 2013 changes to the 457 temporary skilled worker program
There have been many changes made by the government (some expected and others not) in an attempt to limit what is alleged to have been rorting of the system and the use of the system to the disadvantage of local workers.
The specific changes were not detailed prior to 1 July 2013. This is another example of DIAC not giving employers and visa applicants any real warning of incoming changes.
It also appears that many of these changes are retrospective in nature and will apply to lodged applications that had still not been decided by 1 July 2013. This is grossly unfair as applicants have lodged applications correctly under the regulations as at the date of lodgement. To take the application fee and then move the goal posts makes it extremely difficult for everyone concerned.
One big change which was highlighted prior to 1 July – Labour Market Testing -now appears to only be going to be phased in in November this year rather than commencing now. However the ‘genuineness’ test is arguably a ‘back-door’ market testing technique. Retrospective application of the regulations in these circumstances is impossible to satisfy.
Unfortunately practitioners and clients can all only react to these changes by DIAC. Clearly the end result of these changes as well as the increase in DIAC case load brought about by the changes and the inevitable misunderstanding or misapplication of the new regulations by case-officers, will be that processing times will slow down.
The following is a list of the most common issues summarised from the DIAC web-site.
Ongoing requirement to train Australian citizens and permanent resident workers
Before 1 July 2013 - Businesses wishing to become standard business sponsors had to meet the training requirement by providing evidence of:
- recent payments by the business to an industry training fund to a value of at least 2 per cent of the payroll, or
- recent expenditure equivalent to 1 per cent of the payroll in the provision of training to Australian and permanent resident employees in the business.
The benchmarks required the business to commit to maintaining that level of expenditure in each fiscal year, for their term of approval as a sponsor.
After 1 July 2013 - Meeting the training benchmarks is now an ongoing and enforceable requirement rather than a commitment. In addition, sponsors will be obligated to maintain records relating to training. This includes start-up businesses (i.e. businesses trading for less than 12 months) who initially provide an auditable training plan. Previous sponsors must also demonstrate that they continued to meet the benchmarks during their sponsorship term when applying for a new sponsorship or varying the terms of their current sponsorship.
Demonstrating a genuine skill need
Before 1 July 2013 - It was not possible to refuse a subclass 457 nomination even where the position was being presented as more skilled than it was in order to be eligible for the program.
After 1 July 2013 - A delegate must now be satisfied that the nominated position is genuine and may refuse the application if:
- the tasks of the nominated occupation do not correspond to the tasks of an eligible occupation, or
- the position associated with nominated occupation is not genuine.
Indicating how many workers an employer will sponsor
Before 1 July 2013 - Sponsors were able to sponsor and nominate unlimited subclass 457 visa holders.
After 1 July 2013 - Employers are restricted to sponsoring the number of subclass 457 workers that was approved in their sponsorship application over the term of their sponsorship. They can vary this number by applying for a variation to their sponsorship agreement. A sponsorship agreement will cease either at either when the number of nominations is reached or the time period expires (1, 3 or 6 years). Accredited sponsors will not be required to nominate the number of workers they intend to sponsor.
Skills assessments for generalist occupations
Before 1 July 2013 - Low skilled occupations not eligible to use the program could access it by being presented as a Program and Project Administrator or as a Specialist Manager not elsewhere classified because these are not defined in general terms in the Australian and New Zealand Standard Classification of Occupations (ANZSCO).
After 1 July 2013 - The assessment of generalist occupations has now been strengthened. Program and Project Administrator and Specialist Manager not elsewhere classified applicants must undertake a formal skills assessment.
Market salary rate assessment expanded to regional locality
Before 1 July 2013 - A sponsor had to engage subclass 457 visa holders on equivalent terms and conditions that were, or would be, provided to an Australian working in an equivalent role or position. Where there was an Australian worker employed by the sponsor in an equivalent role, the market salary rate for the nominated position was based on the terms and conditions of that worker.
Where there was no equivalent Australian worker, the employer was required to satisfy the Department that the terms and conditions of employment were appropriate for that position in that location and industry.
After 1 July 2013 - The market salary rate provisions have now been expanded to apply beyond the particular workplace to that workplace’s regional locality.
Where there is no equivalent Australian worker, the employer is still required to satisfy the Department that the terms and conditions of employment are appropriate for that location and industry.
Occupation based exemptions to the English language requirement are removed
Before 1 July 2013 - Most occupations were exempt from the English language requirement with the exception of Technicians and Trade Workers.
After 1 July 2013 - Occupation based exemptions have now been removed. Other exemptions will remain unchanged including:
- a nominated salary that is over the ELSET amount
- a passport from Canada, United States of American , United Kingdom, Republic of Ireland and New Zealand, or
- have completed at least 5 consecutive years of full-time study in a secondary and/or higher education institution where the instruction was delivered in English.
English language requirement must be met when new nomination is lodged
Before 1 July 2013 - To be granted a subclass 457 visa an applicant had to demonstrate that they meet the English language requirement or that they were exempt. One of the exemptions was for applicants whose sponsor indicated that their annual earnings were going to be above a specified threshold (the English Language Salary Exemption Threshold – ELSET). If, after the grant of the visa, that sponsor made a new nomination with a salary lower than the ELSET, the visa holder was not required to demonstrate that they met the English requirement.
After 1 July 2013 - If a subclass 457 visa holder who was previously exempt from the English language requirement because their annual earnings were above the specified threshold, is renominated at a salary level lower than the ELSET, the visa holder will be required to demonstrate that they either meet the English language requirement or that they are otherwise exempt.
Restricted terms of sponsorship for start-up businesses
Before 1 July 2013 - The terms of sponsorship for start-up businesses were the same as standard business sponsors.
After 1 July 2013 - The term of sponsorship approval for start-up businesses has been amended to an initial 12 months and all subclass 457 visa holders sponsored by start-up businesses are limited to an initial 12 month visa.
Requiring visa holders to begin work within 90 days of arriving in Australia
Before 1 July 2013 – There was no explicit requirement for a visa holder to commence work with their sponsor. This made it difficult for the Department to cancel visas when work had never commenced.
After 1 July 2013 - It is now a part of condition 8107 that a Subclass 457 visa holder must commence work with their sponsor within 90 days of arriving in Australia.
Extend the period in which a visa holder can seek new sponsored employment
Before 1 July 2013 – Condition 8107 is a visa condition that requires Subclass 457 visa holders only work for their sponsoring employer, in the occupation or position in relation to which the visa was granted; and if the holder ceases employment — the period during which the holder ceases employment must not exceed 28 consecutive days. This time period is to allow Subclass 457 holders to find a new sponsor or to depart Australia. If a visa holder does not comply with their conditions they are liable to have their visa cancelled.
After 1 July 2013 - The time period for Subclass 457 holders to find a new sponsor or to depart Australia, if they cease employment with their sponsoring employer, is extended to 90 consecutive days.
Requiring mandatory registration, licensing or membership
Before 1 July 2013 – For certain occupations, visa holders are required to obtain any mandatory registration, licence or membership in the state or territory where their position will be located. There was no restriction to a person being granted a Subclass 457 visa prior to obtaining the necessary registration, licence or membership. However, if a visa holder failed to obtain the mandatory registration, licence or membership, it was very difficult for the Department to take action.
After 1 July 2013 - The condition will also be extended to require Subclass 457 visa holders to have sought to obtain within 28 days any mandatory registration, licence or membership for their occupation in the state or territory they are employed.
Fair Work Inspectors as Inspectors under the Migration Act and exercise of powers for Migration Act purposes
Before 1 July 2013 – The department currently has 32 active DIAC Inspectors appointed under the Migration Act to monitor compliance with sponsorship obligations.
After 1 July 2013 - The Government’s capacity to monitor and investigate compliance with the temporary sponsored work visa program will be expanded by enabling Fair Work Inspectors to exercise powers for the purposes of the Migration Act. Fair Work Inspectors will investigate compliance with the sponsorship obligations to ensure workers are working in their nominated occupation and being paid market salary rates.
Please note also
An increase to the Temporary Skilled Migration Income Threshold (TSMIT) and the English Language Salary Exemption Threshold (ELSET)
In addition to these extraordinary changes – but not a part of them because the TSMIT is indexed every year – from 1 July 2013, the TSMIT and the ELSET, have been indexed by 4.8 per cent, in line with the Australia-wide increase in average weekly earnings. This has increased TSMIT from $51 400 to $53 900 and the ELSET from $92 000 to $96 400.