Australian Immigration Newsflash: 457 Pending Changes

On 1 April 2009 the Minister for Immigration & Citizenship announced pending changes to the 457 visa program.  These changes reflect the Government’s concern that the 457 visa program had at times resulted in exploitation of overseas workers and discrimination against the local labour force. 

A summary of the changes are detailed below, together with our comments regarding how these changes might impact on your business and strategies for responding to the changes. 

Increase in Minimum Salary Level

The prescribed minimum salary level (MSL) for specific occupations will be increased from 1 July 2009 by 4.1% in accordance with Australian Bureau of Statistics “all employees’ earnings” for 2008. This increase will apply to all new and existing 457 visa holders.  New minimum base salaries to apply from 1 July 2009 will be:

• $45,221.04 plus 9% superannuation for gazetted occupations (apart from IT occupations)
• $61,918.68 plus 9% superannuation for IT occupations

Please note that MSL is based on a 38 hour week.  If additional hours are worked the MSL must be adjusted accordingly.

Employers will need to ensure that from 1 July 2009, their existing 457 visa holders receive a base taxable salary (before bonuses, living away from home allowance, superannuation and any other benefits) at least equal to the new increased MSL prescribed for each occupation.  Employers will also need to establish that new 457 visa applicants will be paid a base salary equal to or above the new increased MSL.  

It is also important to note our March 457 Newsflash and remember that for new 457 applications the MSL is indeed the minimum salary permitted and Immigration Officers now have the discretion to examine if the salary is in accordance with actual Australian standards for the specified occupation.  

Employers will need to to ensure that they comply with the new MSL from 1 July for existing 457 visa holders and may want to consider how salary packages are structured to emphasise base salary entitlements over other entitlements.

Please contact a Migration Agent employed by Stirling Henry Migration for further clarifications. 

Market Based Minimum Salary

In addition to the 1 July 2009 changes to the MSL, the Government will introduce a new minimum base salary for particular occupations based on market rates.  The Government expects the market rate MSL to be implemented in mid-September 2009.  The new market rate MSL will be detailed and will outline minimum salaries for all authorised 457 occupations.  The new market rate MSL will be set at or above the 1 July 2009 figures.

This reflects changes detailed in our previous newsflash in which we advised of the intention of the Government to place greater emphasis on market salaries when assessing 457 visa applications.  Employers will therefore need to inform themselves of current market rates for particular occupations and ensure that all employees are paid an appropriate base salary for their specific qualifications and job description.

It will be essential to contact Stirling Henry Migration before proceeding with job offers for potential 457 applicants to ensure the MSL based on market rate will be satisfied.

Increase in Minimum Language Requirements

From 1 July 2009, 457 visa applicants from high risk countries in trade occupations (including chefs) will need to obtain a minimum IELTS score of 5 in each of the four categories of reading, writing, listening and speaking.  This is an increase from the previous minimum score of 4.5. 

This change may affect 457 visa applicants from high risk countries in trade occupations who do not have their 457 visa application approved before 1 July 2009.  We do not yet know if the change will be implemented retrospectively.  Applicants who have not obtained this minimum score and who have not had their application approved by 1 July 2009 may need to re-sit an IELTS examination.  Employers and applicants should also be aware that due to the limited number of places to sit IELTS examinations in many regions, these changes could result in significant delay to those visa applicants who are required to re-sit IELTS examinations.

Skills Assessment Requirements

From 1 July 2009, the Government will progressively introduce a formal skills assessment for visa applicants from high risk countries in trade occupations.  The skills assessment will be developed in consultation with local trade organisations and other stake holders.  It is expected that this assessment will involve a formal review of overseas qualifications to ensure that 457 visa applicants have the requisite level of experience and training, regardless of their proposed salary. 

The definition of 'high risk country' has not yet been released.  However, it can be assumed high risk will include China, India, the Philippines, Zimbabwe and others.  We will send a further newsflash when the definition of 'high risk country' has been announced.

Commitment to Employing Local Labour and Providing Training

Employers wishing to employ 457 visa holders will need to be able to satisfy the Government that they have a strong commitment to employing local labour and have a non-discriminatory employment practice that does not favour 457 visa holders over available local labour. 

The Government proposes to introduce benchmarks to clarify its training requirements for local employees and employers seeking to access the 457 visa program will need to be able to demonstrate a commitment to training local labour.  Training benchmarks have not yet been made publicly available.  We will advise on the training benchmarks immediately they are announced.  In the interim, employers should ensure ongoing training of its local workforce and keep records of training undertaken by local employees. 

It is strongly recommended that if you sponsor 457 visa holders or are considering becoming a sponsor that you discuss training requirements with a Registered Migration Agent employed by Stirling Henry Migration.

Comments

The 457 program is currently being very closely scrutinised by the Department of Immigration & Citizenship.  We expect scrutiny to remain extremely tight during the current economic climate. 

We will keep you advised of how these changes will be implemented in practice.  It is recommended that you seek professional advice from Stirling Henry Migration concerning how the changes may affect your business.