Subclass 457 - Government Review

At a National Press Club lunch on 10 September 2014, the Minister for Immigration and Border Protection, the Hon Scott Morrison, discussed the Government’s response to the just released report by the panel conducting the Independent Review into Integrity in the Subclass 457 programme.

The Minister praised the report for its “balanced and measured” 22 recommendations.

Minister Morrison did not give any details of the implementation date for the recommendations, but said that the Government will give a detailed response “in the weeks and months ahead”.

We will provide further details as soon as they become available.

Report Recommendations

Recommendation 1 – Core solutions

1.1 That, in lieu of the existing Ministerial Advisory Council on Skilled Migration, a new

tripartite ministerial advisory council, which is not necessarily prescribed in legislation, be

established to report to government on skilled migration issues.

1.2 That the new ministerial advisory council be supported by a dedicated labour market

analysis resource.

Recommendation 2 – Core solutions

2. Acknowledging that, as the OECD has pointed out, employer-conducted labour

market testing is not “fully reliable”, and in the Australian context has proven ineffective,

that the current legislative requirement for labour market testing be abolished.

Recommendation 3 - Core solutions

3.1 That the Consolidated Sponsored Occupations List be retained as a list of

occupations which are at Skill Level 3 and above, and that the Consolidated Sponsored

Occupations List should be able to be amended by two means: first, the addition of skilled

occupations which can be shown to exist in the community but which may not be on the

ANZSCO list; and, second, the refinement of the Consolidated Sponsored Occupations List in

cases where there may be integrity or appropriateness concerns. Any occupations not on

the list, which are usually referred to as semi-skilled, may be addressed as part of the

Labour Agreement regime.

3.2 That the new ministerial advisory council provide advice on those occupations where

some concern exists and recommend additional requirements or limitations on occupations

and/or regions.

Recommendation 4 - Market Salary Rate

4. That the market rate framework continue to operate as a core component of the

457 programme, but that the earnings threshold above which there is an exemption from

the need to demonstrate the market rate should be aligned with the income level above

which the top marginal tax rate is paid (currently at $180 000).

Recommendation 5 - Temporary Skilled Migration Income Threshold

5.1 While there is an argument for abolishing the Temporary Skilled Migration Income

Threshold, that it nevertheless be retained to allow for streamlining within the wider

programme, and that concessions to the Temporary Skilled Migration Income Threshold be

afforded under Labour Agreements, Enterprise Migration Agreements and Designated Area

Migration Agreements, as appropriate.

5.2 That the current Temporary Skilled Migration Income Threshold be retained at

$53 900 p.a. but that it not undergo any further increases until it is reviewed within two years.

5.3 That the two roles currently performed by the Temporary Skilled Migration Income

Threshold (that is, acting as a determination of the eligibility of occupations for access to the

scheme and as an income floor) be more clearly articulated in the 457 programme, and that

consideration be given to accepting the eligibility threshold as up to 10 per cent lower than

the Temporary Skilled Migration Income Threshold.

5.4 That the government give further consideration to a regional concession to the

Temporary Skilled Migration Income Threshold, but only in limited circumstances where

evidence clearly supports such concession.

5.5 That in circumstances where the base rate of pay is below the Temporary Skilled

Migration Income Threshold, the current flexible approach adopted by the department,

taking into account guaranteed annual earnings to arrive at a rate that meets the minimum

requirement of Temporary Skilled Migration Income Threshold be continued and made

more visible to users of the programme and their professional advisors.

Recommendation 6 - Training benchmarks

6.1 That the current training benchmarks be replaced by an annual training fund

contribution based on each 457 visa holder sponsored, with the contributions scaled

according to size of business.

6.2 That any funding raised by way of a training contribution from sponsors of 457 visa

holders be invested in:

a) training and support initiatives, including job readiness, life skills, and outreach

programmes for disengaged groups, particularly youth who have fallen out of the

school system;

b) programmes allowing employers to take on apprentices/trainees from target groups,

including Indigenous Australians and those in rural and regional areas;

c) mentoring programmes and training scholarships aimed at providing upskilling

opportunities within the vocational training and higher education sectors that

address critical skills gaps in the current Australian workforce. Target sectors include

those industries, such as nursing and the IT sector, that rely heavily on 457 workers;

and,

d) training and support initiatives for sectors of critical national priority. Target sectors

include industries experiencing significant increase in labour demands, such as the

aged care and disability care sectors.

6.3 That funds raised through the training contribution be dedicated to this training role

and that the government reports annually on how these monies are spent by the

Department of Industry.

6.4 That there be a new sponsor obligation to ensure that the cost to the sponsor of the

training contribution cannot be passed onto a 457 visa holder or third party.

Recommendation 7 - English language requirement

7.1 That the English language requirement be amended to an average score.

For example, in relation to International English Language Testing System, the 457 applicant

should have an average of 5 across the four competencies (or the equivalent for an

alternative English language testing provider).

7.2 That greater flexibility be provided for industries or businesses to seek concessions

to the English language requirement for certain occupations on a case by case basis, or

under a Labour Agreement, Enterprise Migration Agreement or Designated Area Migration

Agreement, as appropriate.

7.3 That consideration be given to alternative English language test providers.

7.4 That consideration be given to expanding the list of nationalities that are exempt

from the need to demonstrate they meet the English language requirement.

7.5 That instead of the current exemption which requires five years continuous study,

five years cumulative study be accepted.

Recommendation 8 - Genuine position requirement

8.1 That there be targeted training for decision-makers in relation to the assessment of

the genuine position requirement.

8.2 That before decision-makers refuse a nomination on the basis of the genuine

position requirement, the sponsor be invited to provide further information to the

decision-maker.

Recommendation 9 - Skills assessments

9. That the government should explore how skills assessments could more

appropriately recognise a visa applicant's experience.

Recommendation 10 - Sponsorship

10.1 That Standard Business Sponsors should be approved for five years and start-up

business sponsors for 18 months.

10.2 That as part of the government’s deregulation agenda, the department should

develop a simplified process for sponsor renewal.

10.3 That the department consider combining as many sponsorship classes as possible.

10.4 That when more detailed information is available, the department should investigate

the alignment of overseas business and Labour Agreement sponsorship periods with the

general Standard Business Sponsorship approval period.

10.5 That the timeframe for the sponsor to notify the department of notifiable events as

set out in legislation should be extended to 28 days after the event has occurred.

10.6 That the department should explore options that would enable the enforcement of

the attestation relating to non-discriminatory employment practices.

10.7 That it be made unlawful for a sponsor to be paid by visa applicants for a migration

outcome, and that this be reinforced by a robust penalty and conviction framework.

Recommendation 11 - Fees

11. That the government should review the fee structure, especially for secondary visa

applicants and visa renewal applications.

Recommendation 12 - Information provision

12.1 That sponsors be required to include as part of the signed employment contract:

a) a summary of visa holder rights prepared by the department; and,

b) the Fair Work Ombudsman’s Fair Work Information Statement.

12.2 That improvements be made to both the accessibility and content on the

department’s website specific to 457 visa holder rights and obligations, and utilising the

department’s significant online presence more effectively to educate 457 visa holders on

their rights in Australia.

Recommendation 13 A streamlined approach

13.1 That consideration be given to creating streamlined processing within the existing

457 programme as a deregulatory measure. To maintain programme integrity, streamlining

should be built around risk factors including business size, occupation, salary and sponsor

behaviour.

13.2 That should the recommended nomination and visa streamlining outlined in this

report be implemented, the department should investigate a redefined accredited sponsor

system. Current accredited sponsors should retain their priority processing benefits until

their sponsorship ceases; however, no further sponsors should be afforded accredited

status until a new system is implemented.

Recommendation 14 - Labour Agreements

14.1 That Labour Agreement negotiation times be significantly improved to enable a

demand-driven and responsive pathway for temporary migration, where the standard

457 programme arrangements are not suitable.

14.2 That to enable the Labour Agreement pathway to be more open and accessible for

additional industry sectors, consideration be given to the development of other template

agreements that will address temporary local labour shortages in industries of need.

Recommendation 15 - Pathways to permanent residence

15.1 That 457 visa holders be required to work for at least two years in Australia before

transitioning to the Employer Nomination Scheme or Regional Sponsored Migration

Scheme, and that consideration be given to the amount of time required with a nominating

employer being at least one year.

15.2 That consideration be given to reviewing the age restriction on those 457 visa

holders transitioning to the Employer Nomination Scheme or Regional Sponsored Migration

Scheme.

15.3 That consideration be given to facilitating access for partners of primary sponsored

457 visa holders to secure permanent residence under the Temporary Residence Transition

stream.

Recommendation 16 - Role of education

16. That consideration be given to the allocation of more resources to programmes

aimed at helping sponsors understand and comply with their obligations, whether those

programmes are delivered directly to sponsors or through the migration advice profession.

Recommendation 17 - Monitoring

17. That greater priority be given to monitoring, and that the department continue to

enhance its compliance model to ensure those resources are applied efficiently and

effectively.

Recommendation 18 - Inter-agency cooperation

18.1 That there be greater collaboration between the department and the Australian

Taxation Office to uphold integrity within the 457 programme and minimise the burden on

employers.

18.2 That a change to 457 visa conditions be introduced to place an obligation on the visa

holder to provide the department with their Australian tax file number.

Recommendation 19 - Fair Work Ombudsman

19.1 That the Fair Work Ombudsman’s current complementary role in monitoring

compliance and referral of findings to the department for action should continue.

19.2 That the department should provide information in real time that is both current and

in a format compatible with that of the Fair Work Ombudsman..

Recommendation 20 - Fair Work Commission

20.1 That the department monitor decisions of the Fair Work Commission, so as to

determine if sponsors have breached obligations or provided false and misleading

information

20.2 That the department require sponsors, when lodging a new nomination application

to certify that there has been no change to the information provided to the department in

relation to whether the business or an associated entity has been subject to "adverse

information" as that term is defined in the legislation.

Recommendation 21 - Sanctions

21.1 That dedicated resourcing be made available to the department to enable the

investigation and prosecution of civil penalty applications and court orders.

21.2 That the department disclose greater information on its sanction actions and

communicate this directly to all sponsors and the migration advice profession as well as

placing information on the website.

Recommendation 22 - Systems enhancements

22. That the department investigate the feasibility of system improvements that

facilitate greater linkages with information held by other government agencies.