This has been quite a dynamic year for the Subclass 457 visa program. As a starting point, the Department of Immigration and Citizenship (DIAC) responded to the current economic climate and increased unemployment levels in Australia by tightening the criteria for new visa applications. In July the Minimum Salary Level (MSL) for Subclass 457 visa holders was increased.
On Monday, 14 September 2009, DIAC made further and more far reaching changes to the Subclass 457 visa program. The impetus behind these changes is to ensure that the terms and conditions for Subclass 457 visa holders are no less favourable than the terms and conditions that a company would provide to an Australian employee. The implications of the amendments to the Subclass 457 visa program are extensive and complex.
The aim of this article is to draw your attention to these changes and provide a synopsis of what we see as the most important aspects of the new Subclass 457 visa program.
Sponsorship Obligations:
DIAC have amended the sponsorship obligations for a company approved as a Standard Business Sponsor. Once again, the emphasis behind these new obligations is ensuring equivalent terms and conditions of employment for Subclass 457 visa holders and Australian staff.
On a separate but related note, DIAC have also introduced a stronger sanctions scheme for those found to be in breach of sponsorship obligations. The types of sanctions DIAC can impose depend on the seriousness of the breach found and can range from barring a company from sponsoring more people for a specified term, to applying to a Court for a civil penalty order of up to $33,000 for a corporation and $6,600 for an individual, for each breach found.
Salary Levels:
Of key importance so far is the switch from MSL to Market Rate Salaries. Previously, when calculating the base salary package of a sponsored employee it was necessary to ensure that the MSL (i.e. exclusive of superannuation and other salary packaged items) was above the minimum threshold set by DIAC, i.e. $61,920 for IT professionals and $45,220 for other professionals. In keeping with the theme of ensuring equivalent terms and conditions of employment, 457 visa holders must now be paid the Market Rate salary for their role.
The Market Rate salary is determined by industrial arrangements in place for each visa holder. Generally, a company can establish a Market Rate salary by providing DIAC with evidence of collective agreements or award conditions. Where this is not applicable, then the presentation of individual contracts for Australian employees working in a corresponding role at the same location within the company showing an equivalent salary package will suffice. In the event that there is no Australian employee working in a similar role, the employer can provide alternate evidence of the Market Rate salary by way of industry surveys, ABS data, etc. The new Market Rate salary requirement must be met for all visa applications approved from 14/9/09 onwards. Employers with existing staff on 457 visas have until the 31st December 2009 to ensure that the salary level for sponsored staff meet the Market Rate standard.
It is also important to note that the salary level for the position itself must be above the new Temporary Skilled Migration Income Threshold (TSMIT) set by DIAC. The TSMIT remains at $61,920 for IT professionals and $45,220 for other professionals. Where the salary level for a position is below the TSMIT, it is not possible to increase the visa applicant’s salary level above these amounts in order for the visa application to be approved.
Conditions for 457 visa holders:
From 14 September 2009, current 457 visa holders who want to change employers will not be required to apply for a new Subclass 457 visa. However the new company must be approved as a Standard Business Sponsor and a new nomination application for the position must be lodged and approved. When transferring a 457 visa to a new position with another company, the period of the current visa still applies.
In order for a new Subclass 457 visa application to be approved, the applicant must provide evidence that they have obtained adequate health insurance. The visa holder will then be required to maintain adequate health insurance for the length of their visa.
How can we help?
As stated at the beginning of this article, the changes to the Subclass 457 visa are extensive and complex and this is not intended as a comprehensive guide to the new 457 visa program. Our team is well placed to assist your business to navigate its way through these new regulations, ensuring that you can make the most of this important visa program. Our team can assist with all new visa applications and we can also provide advice to company’s with 457 visa holders already on staff to ensure that sponsor obligations are being met.
For more information, contact Sarah McCarthy on 03 9600 0333 or smccarthy@entitysolutions.com.au