Upcoming changes to the 457 Visa Program

On 23 February 2013, the Minister for Immigration and Citizenship announced a number of reforms to the subclass 457 program. The Department of Immigration & Citizenship state that the reforms are aimed at strengthening the capacity to identify and prevent employer practices that are not in keeping with the criteria of the subclass 457 program. The measures being brought forward include:

• the introduction of a ‘genuineness’ criterion under which the department may refuse a nomination if they determine that the position does not fit within the scope of the activities of the business
• an increase in market salary exemption threshold from $180 000 to $250 000
• the removal of English language exemptions for certain positions. Many long-term 457 workers go on to apply for permanent residence, and this change is being introduced so that the 457 program requirements are brought into line with the permanent Employer Sponsored program which requires a vocational English ability. Applicants who are nominated with a salary greater than $92,000 will continue to be exempted from the English language requirement
• enhanced regulatory powers for the department to ensure that the working conditions of sponsored visa holders meet Australian standards
• amendments to existing training benchmark provisions to clarify that an employer’s obligation to train Australians is ongoing and binding for the duration of their approved sponsorship, including for newly established businesses
• amendments to clarify that 457 workers may not be on-hired to an unrelated entity unless they are sponsored under a labour agreement
• amendments which will allow the department to refund a visa application fee in circumstances where an employer nomination has been withdrawn.

What is the intent of these measures?

The Department of Immigration and Citizenship has stated that capacity to detect and respond to the integrity concerns is limited by current legislation. The new measures are being introduced to strengthen the integrity framework. The department claims that the measures will also close loopholes in the current legislative and policy settings to ensure that the program can only be used by appropriately skilled persons and to fill genuine skills shortages.
The reforms are also designed to strengthen the sponsorship obligations to ensure that the working conditions of sponsored visa holders meet Australian standards.

When will the changes happen?

The comprehensive suite of measures will be introduced on 1 July 2013. In the lead up to the changes, detailed information will be made available to assist sponsors and visa holders and their representatives understand the new requirements.  We will provide further updates as information becomes available.

How will the changes affect Australian businesses?

The department claims that the changes will not adversely affect the vast majority of employers who are using the program appropriately. The changes will, however, strengthen the government's capacity to identify and prevent employer practices that are not in keeping with the purpose of the 457 program.

How will the changes affect current 457 visa holders?

There should be no adverse effects on existing visa holders. The 457 visa is a temporary visa, intended for filling short to medium term skill shortages, in a quick, flexible way to meet business needs. The Worker Protection reforms which took effect in September 2009 introduced a range of sponsorship obligations to ensure the working conditions of sponsored visa holders meet Australian standards.

How will the changes affect future 457 visa applicants?

The vast majority of 457 visa applicants who are genuine will not be affected by the changes. In some circumstances applicants whose applications are processed after 1 July 2013 may be required to provide further evidence to demonstrate their claims for a 457 visa.

What affect will the changes have on addressing real skills shortage problems?

Where employers can demonstrate a genuine need for skilled workers from overseas, they will still be able to sponsor people to fill skills gaps. Employers who make genuine attempts to open job opportunities up to Australians, who pay appropriate market rates and who are committed to the ongoing training and up-skilling of Australians will still have access to the subclass 457 program to supplement their skilled workforce.

What is labour market testing and how has it been used in the past?

Traditional forms of labour market testing involves advertising the position prominently in national and local newspapers, trade magazines and/or on job seeker websites over a number of weeks to prove that no suitably qualified Australians could be found for the position.
In the past, by the time an employer approached the Government to sponsor a skilled worker from overseas, they had already tested the local labour market thoroughly. However, they were still forced to go through the prescribed process which usually involved extra costs and delays for the employer.

Why is the government not reintroducing Labour Market Testing?

The 457 program is an important part of how Australia meets a number of our international trade obligations. These obligations mean that the government cannot limit access to the economy of people who wish to do business with Australia. Part of doing business with Australia often involves sourcing skilled labour from other countries. The department claims that Australia will remain open for business people and service providers and the reforms to the 457 program will not adversely impact these obligations.  Only time will tell with the Federal election this year and the roll out of above changes from 1 July 2013.

If you wish to find out more please do not hesitate to contact us.