This is just one of several questions current sponsor companies should be asking in light of the changes to 457 sponsorship obligations which came into effect on 14 September 2009 as outlined in our Winter Newsletter.
With the introduction of “Market Rate” salaries, there are several areas which now need to be monitored to ensure your 457 visa holders are paid correctly:
• The 457 visa holder must be paid at the same level as an Australian employee would be to do the same job at the same place. The best way to confirm this is either to compare the rate to your Australian employee’s contracts or against industry surveys. Basically, how you usually decide what to offer someone new coming into the role, should be the same mentality used to decide “market rate”.
• Ensure the “base rate of pay” is met, this being $45,220 for non-IT roles and $61,920 for IT roles – whilst the market rate will be a total salary above this level, these are the minimum levels to which a salary can be packaged. This figure therefore includes taxable salary PLUS Living Away from Home Allowances (LAFHA). This is the first time the Department of Immigration and Citizenship (DIAC) has recognised LAFHA as a legitimate form of “earnings” for the purpose of monitoring the salaries of 457 visa holders.
• “TSMIT” or Temporary Skilled Migration Income Threshold - currently also set at $45,220 – is an additional indicator of salary, in that any role with a “market rate” salary below TSMIT would not be able to be sponsored, as this salary level would indicate the role is not highly skilled enough for the 457 visa program.
Additional questions all sponsor companies should now be considering may be:
• Do we have funds put aside for the return airfares of our sponsored personnel and their family members?
It is vital to note that all sponsor companies (including those with 457 visa holders sponsored prior to 14/9/09) are now liable to pay for the return airfares of their 457 visa holders and accompanying family members upon written request from either the visa holder or DIAC. These return travel costs can be an economy airfare to the person’s home (passport) country and may also include the costs of transport from their residence to the airport – but not relocation of their furniture or goods. Evidence of payment should be provided to DIAC also.
• Do our 457 visa holders sponsored prior to 14 September 2009 hold private health insurance to reduce our exposure to any public hospitals cost (over and above Medicare entitlements) – and do our new 457 visa holders post 14/9/09 hold this cover to ensure they meet the new 8105 visa condition and can therefore stay sponsored?
For 457 visa holders prior to 14/9/09 or for those “transferring” their 457 visa to a new sponsor, the obligation for the company to cover any public hospital costs remains, and will transfer all to the new sponsor company where a transfer occurs. For new 457 visa holders post 14/9/09 however, the obligation shifts to the 457 visa holder to ensure they meet Condition 8105 and have private health insurance coverage for both themselves and their family members – and maintain this cover during their visa stay or risk cancellation of the visa by DIAC.
The alternative is for those from countries with reciprocal Medicare rights to obtain a Medicare card and provide this to DIAC. As you must be onshore to do so, gap travel insurance cover may be required if traveling to Australia from offshore.
For Irish passport holders, the only requirement is to show a copy of their valid passport as they have special Medicare cover– just luck of the Irish I guess!
• Do we have a system in place to ensure notification to DIAC of any 457 visa holders leaving our employment within 10 days – and also to inform DIAC when a request for return airfare is made and met?
As noted above, once a written request for the return airfare has been made (at any time after ceasing work with you unless they depart of their own volition or transfer to a new Sponsor or obtain permanent residence) – your company must facilitate this request within 30 days and then provide proof to DIAC within 10 days. You must also notify DIAC of any 457 holder ceasing work within 10 days.
• Are we clear on the fact that any “claw back” clauses in 457 visa holder’s original contracts for reimbursement of visa fees in the event of their leaving within a certain period – are now defunct?
Whilst many sponsor companies previously included contract clauses stating that a 457 visa holder would need to reimburse visa fees paid on their behalf if they left employment within 12 months, for instance, under the new sponsor obligations these clauses cannot be enforced and have so become defunct.
Additional obligations exist, so if you are considering becoming a sponsor company of 457 visas or are a current sponsor needing expert advice, please do seek the advice of a Registered Migration Agent to ensure all arrangements made are fully compliant with the new regulations.
For those companies unsure of monitoring the salaries of their 457 visa holders, or of how to salary package in the most effective way without falling foul of DIAC, please feel free to contact one of our Customer Executives on the numbers below for details of how Entity Backoffice can assist you with an outsourced payroll model.
To obtain further information on our comprehensive Migration services, please contact our Manager of Migration Services, Ms Lindy Noone (MARN: 0322507) on 03 9600 0333 or at lnoone@entitysolutions.com.au.
* Entity Migration is a division of Entity Solutions