It has been a year of change for the subclass 457 visa program. In our previous blog post about the 457 program in July, Kate wrote about the changes to the subclass 457 visa and how they will affect Australian businesses. In this blog post we will review the changes from a labour agreements perspective.
While the majority of changes to the subclass 457 visa will affect sponsors under the standard business sponsorship program, there are some changes that will apply to new and existing labour agreements.
About three per cent of all subclass 457 visas are granted under labour agreements. At June 2013 there were 162 labour agreements in effect and a further 71 under negotiation.
Some of the legislative changes that affect both labour agreement sponsors and their sponsored workers include:
- Commencement of work—sponsored 457 visa holders must commence work with their sponsor within 90 days of arriving in Australia.
- Finding a new sponsor—subclass 457 visa holders who cease employment with their sponsoring employer have 90 days to find a new sponsor or depart Australia.
- English language requirement—occupational English test score of ‘B’ in each of the four test components is now accepted for 457 visa applications, bringing this element of the subclass 457 program into alignment with the Employer Nomination Scheme.
- English exemptions—-occupation based exemptions to the English language requirement have been removed, with the assessment of generalist occupations strengthened.
- Skills assessments—applicants nominated in a generalist occupation, such as program and project administrator and specialist manager not elsewhere classified, must now undertake a formal skills assessment.
More information about the 1 July subclass 457 visa reforms is available on our website.
Existing and prospective labour agreement sponsors should also note that the temporary skilled migration income threshold increased from $51 400 to $53 900 on 1 July 2013.
More information is provided in the updated information packs for standard, on-hire, and meat industry labour agreements included below. For more information about labour agreements, visit the department’s website or email the specialist team for your industry:
Resources sector employers: firstname.lastname@example.org
On-hire employers: email@example.com
Meat processing employers: firstname.lastname@example.org
All other industries and employers: email@example.com
Reforms to the subclass 457 visa commenced on 1 July.
How will the changes affect Australian businesses?
The changes will not adversely affect the 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 subclass 457 program.
If the department has any concerns that an employer is not committed to training Australians, or a nominated position may not be genuine, then they may be requested to provide additional justification before a sponsorship or nomination can be approved.
Sponsors are also required to understand their new obligations.
How will the changes affect current subclass 457 visa holders?
There will be no adverse effects on existing visa holders. However, visa holders should note the changes to the English language and skills requirements if they plan to change employment, change their occupation or seek a further subclass 457 visa.
How will the changes affect subclass 457 visa applicants?
All subclass 457 visa applications lodged before 1 July 2013 but not finalised, will be subject to the new visa requirements. Your case officer will request further information if required.
All subclass 457 visa applications that are lodged after 1 July 2013 will be subject to the new visa requirements. The majority of subclass 457 visa applicants will not be affected by the changes.
In some circumstances further evidence to demonstrate claims for a subclass 457 visa may be required. Visa applicants should note the changes to the English language and skills requirements.
Are there changes to how subclass 457 applications can be lodged?
All subclass 457 sponsorship, nomination and visa applications must now be lodged online. Paper applications are no longer accepted.
For more information on the changes please visit the department’s website.
It would be hard to have missed the commentary that has followed the minister’s recent announcement of an Enterprise Migration Agreement (EMA) for the Roy Hill Project in Western Australia. It is important to understand the facts of the EMA program and why it was introduced.
In a previous post, the rationale for EMAs was outlined in detail. A report from the National Resources Sector Employment Taskforce in July 2010 recommended their introduction. Additional evidence has also pointed to the need for a migration option which guarantees large mining projects have the workers to proceed—for example, the Skills Australia interim report of 2011 on resources sector skill needs indicated that by 2016, Australia will have a shortfall of 89 000 skilled workers in the resources sector.
Let’s address the most commonly raised concerns about EMAs.
‘EMAs and the negotiations around them are secretive’
An EMA is a contract between the Australian Government and the project owner. A contract like this cannot be fully disclosed because it contains commercially-sensitive information. The EMA guidelines require that extensive consultation must occur with all key stakeholders before an EMA can be agreed. The department will publish projects which have an active EMA.
‘EMAs will take away Australian jobs’
This is untrue. The government’s priority is to ensure suitably qualified Australian job seekers have every opportunity to find work in the resources sector. To assist, a Resources Sector Jobs Board was created to help Australians find employment opportunities offered by the mining boom.
However, there is a large body of evidence that points to significant skills shortages in the resources sector over the coming years. This shortfall suitably skilled workers is compounded by the unprecedented demand for Australian minerals and resources and the high levels of capital expenditure that are flowing into the country.
The EMA program aims to lock in these large mining projects to ensure their viability. This helps secure Australian jobs and supports future Australian workers entering into the sector through training and apprenticeships, which are an integral part of all EMAs.
‘EMAs will undermine Australian working conditions and wages’
This is untrue. The Worker Protection Act 2008, introduced in September 2009, requires overseas skilled workers be paid the market salary rate and provided with the same terms and conditions of employment as an Australian worker doing the same job at the same place. This ensures two things—that the employment conditions of Australian workers are maintained and not undercut; and that overseas workers are treated fairly in the workplace.
Sponsorship obligations also require employers to pay the travel costs to enable 457 workers to leave Australia. There is, therefore, no incentive for businesses to reduce costs by employing overseas workers through the skilled program—skilled migrants supplement the Australian labour force, not supplant it.
‘EMAs will result in overwhelming numbers of overseas workers’
This is untrue. Let’s put the numbers in perspective here—the minister has approved up to 1715 overseas workers for the Roy Hill Project. Comparatively, there were around 91 000 subclass 457 visa holders in Australia at 30 June 2012. Overseas workers under this EMA, therefore, represent less than 2 per cent of the overall 457 program.
Further information on EMAs can be found here.
The EMA submission guidelines are located here.
A medium-sized steel fabrication business in Broome, servicing the vast Pilbara and Kimberly regions in Western Australia, faced a challenge not unfamiliar to many regional employers around Australia—recruiting and retaining skilled workers to help the business grow and meet its customers’ needs.
In the shadow of the resources boom, the company also experienced competition for workers with nearby mining projects.
Alongside investing in training and development for local workers, including building opportunities for local Indigenous workers, the 457 program helped the company grow while building a culturally diverse and inclusive workforce.
[stream provider=youtube flv=http%3A//www.youtube.com/watch%3Fv%3D2yu2dELIYUo%26list%3DUUUnvn2vPm2H4RL0MJATh4VQ%26index%3D9%26feature%3Dplcp img=x:/img.youtube.com/vi/2yu2dELIYUo/0.jpg embed=false share=false width=560 height=315 dock=true controlbar=over bandwidth=high autostart=false /]
Employer sponsored visa categories, including the 457 visa program, have the highest processing priority, which means skilled workers can be deployed more quickly into the Australian workforce where they are most needed. Access to skilled workers is critical for regional businesses to prosper, which in turn supports the local community and economy.
The 457 program enables Australian employers in both regional and metropolitan areas to sponsor overseas skilled workers for temporary residence in Australia for a period of up to four years, filling skilled vacancies in their business where the local labour market cannot meet demand.
Joselito* is a 34-year-old motor mechanic from the Philippines. He works for Car Tune car repair in Wagga Wagga. He has been working for his employer for the last two years as a subclass 457 visa holder. Car Tune’s manager has told Joselito the company would like to sponsor him for permanent residence.
Wagga Wagga is an eligible part of Australia for the Regional Sponsored Migration Scheme (RSMS).
Joselito can lodge his application before the reforms are introduced on 1 July and be considered against the current RSMS criteria. However, both the nomination and visa application would have to be lodged on or before 30 June.
A nomination lodged before 1 July can be linked to an application lodged after the reforms are introduced: however, the visa applicant will be considered against the new direct entry stream criteria for RSMS.
Joselito and his employer will benefit from the 1 July permanent employer sponsored reforms because:
- some criteria satisfied at the standard business sponsorship stage won’t be reassessed (for example, that the business is actively and lawfully operating)
- the nomination won’t need to be ‘certified’ by a Regional Certifying Body (RCB) saving the employer time and paperwork, and
- Joselito will be considered to meet the skill requirement because he has already proven his skills.
After 1 July 2012—Temporary Residence Transition stream
Because Joselito has been working for his employer as a motor mechanic on a subclass 457 visa for the last two years, he is eligible to apply for permanent residence through the Temporary Residence Transition stream.
This provides a streamlined and simplified pathway to permanent residence for eligible subclass 457 visa holders. It is being introduced in recognition of the important economic and social contribution these skilled workers make to Australia.
The application process will continue to have two stages: the employer nomination and the visa application. However, the employer will no longer need to seek the certification of an RCB. This means the department will process these nominations much more quickly.
From 1 July, to nominate Joselito for permanent residence, Car Tune will have to meet the following criteria:
- The job or position being nominated for permanent residence is consistent with the position the person held while on their subclass 457 visa.
- The position will continue to be available to the prospective migrant for at least two years on a full-time ongoing basis.
- The terms and conditions of employment are the same as any that would apply to an Australian.
- The employer has met the subclass 457 visa training requirement
Joselito will need to meet key visa criteria, including:
- being less than 50 years of age
- having vocational English language proficiency
At 34-years-old he meets the first criterion. Joselito’s English ability would have been assessed previously for his subclass 457 visa to be granted. He would be able to reuse these results as long as they continue to be valid. From 1 July, IELTS tests results will be valid for three years, rather than the current two years.
Joselito’s skills would not need to be assessed, because he has been employed in the role for two years and Car Tune wish to continue sponsoring him.
*This case study is fictional, and is being used for illustrative purposes only.
We have developed a guide that provides an overview of the 457 program.
The 457 program allows employers to hire skilled overseas workers where experienced Australian workers are not available. It’s the simplest and fastest option that helps businesses deal with skill shortages.
If you are interested in learning more about the 457 program, including how to sponsor and nominate an overseas worker, take a look at our Guide to the 457 program.
We’re always trying new ways of communicating with the public about our migration programs. So this week our 457 policy team is opening up the migration blog to any questions you have about the 457 visa and temporary skilled migration to Australia.
While we can’t provide advice about individual cases, any other questions about the program no matter how specific or broad are welcome.
Here are some examples to stimulate ideas:
- Why do we have temporary migration to Australia?
- How do market rates work?
- What happens if I get fired while on a 457 visa?
- Why do I need to get health insurance while on a 457 visa?
We are looking forward to your questions.
The department recently terminated a labour agreement with a company that was found to be in breach of its obligations by employing workers on a casual basis, underpaying them and providing false and misleading information to the department. The breaches were uncovered during a monitoring exercise by the department. The termination means that the company can no longer employ overseas workers.
Labour agreements are formal arrangements that a number of Australian employers have with the Australian Government to bring skilled and highly specialised workers toAustraliato fill critical vacancies where suitably qualified Australian workers can’t be found to do the job. Overseas workers must be employed full time and on the same salary and conditions as Australians doing the same work at the same location, which protects overseas workers from exploitation and maintains wages and conditions for Australians.
One of the main types of labour agreement is the on-hire template agreement that allows recruitment companies to sponsor highly skilled overseas workers on 457 visas and then place them with other businesses. These workers are often critical in filling the skills shortages being driven by very strong employment growth in the resources sector.
Under the template on-hire labour agreement, the recruitment company must still meet their sponsorship obligations to their sponsored workers, even though they are on-hired to another company.
While the vast majority of sponsors do the right thing, the department will continue to follow any leads that suggest misuse of our visa programs or exploitation of overseas workers. In this case, visa holders affected by the termination have been given a reasonable amount of time to find alternative employment with other approved sponsors.
In November 2011, the government announced reforms to the Fringe Benefits Tax (FBT) treatment of Living Away From Home Allowance (LAFHA) benefits to commence on 1 July 2012.
LAFHA is commonly used by employers to compensate employees for additional costs incurred when they are required to live and work away from their usual place of residence. This can include accommodation and food costs.
Under the current tax system, the provision of LAFHA can increase the take-home pay of employees, including subclass 457 visa holders. The Australian Government has concerns that LAFHA concessions are being exploited by some employers.
The Department of Immigration and Citizenship has received a number of enquiries about how these changes will impact subclass 457 visa holders.
From the department’s perspective, if an employer committed to pay a subclass 457 visa holder LAFHA, it is expected this payment will continue. The only difference will be how the Australian Taxation Office (ATO) views such payments.
For example, if a sponsor committed to pay a subclass 457 visa holder a base salary of $75 000 plus a $10 000 LAFHA, the department expects the employee will continue to be paid a total of $85 000.
If a sponsor is unable to pay the amount equivalent to the LAFHA they may be failing their sponsorship obligations.
A sponsor may decide to lodge a new nomination application to amend the salary offered to the 457 visa holder. However, the sponsor must demonstrate that the new salary continues to be the market salary rate.
Click here for further information on the Australian Tax Office’s LAFHA requirements.
This is a guest post written by Hayley, who works in the department’s 457 policy section.
Yesterday the Minister for Immigration and Citizenship, Chris Bowen MP, and the Minister for Tourism, Martin Ferguson AM MP launched a guide to using the 457 visa program for the hospitality and tourism industries.
The guide will assist employers to use the skilled visa program. You can access the guide below.
Information sessions will be coordinated to provide employers with information and answer questions about the guide. The first information session was in Perth and attracted around 20 employers from tourism and hospitality industries. The department received positive feedback and fielded some specific questions about using the 457 program in these industries. A further eight sessions will be held over the coming three weeks in capital cities and select regional locations. For further details about the department’s information sessions, please click here.
If you have any questions about the 457 program in these industries, please leave a comment below.
Edit: In case you are interested in further information, please see the attached 457 Tourism-Hospitality information session presentation that was delivered at the department’s information sessions.