Latest Updates on Proposed Changes to 457 Visa

July is soon approaching and with that we will see the reforms to the 457 visa scheme come into effect.  Latest updates announced by the Government on the controversial 457 visa scheme include;

• Increase of visa application charge; $900 instead of the current $455
• Employers will need to make every effort to employ Australians before resorting to foreign workers
• Exemption threshold is being raised to $250,000

With the election taking place this year, there has been a lot of political play onto the proposed changes to the 457 visa.  Political leaders are communicating the tightening on 457 visas is to protect “Australian jobs for Australian citizens and residents”.

Increase in visa application charge

From 1 July 2013 the charge for a 457 visa application will increase to $900 from the current $455.  The Government forecasts that the increase in the cost of applying for a 457 visa will raise $198 million over the next four years.

Employers will need to make every effort to employ Australians before resorting to foreign workers.

Fundamentally, the new legislation will require employers to test the market and prove they have tried to hire someone with appropriate skills locally.  Essentially employers will have to advertise a position as a minimum, but may also have to take their positions to jobs expos or recruitment agencies to search for local workers.

However using foreign workers to fill critical gaps in industries such as healthcare will be exempt.

Many small businesses are publically disagreeing with the Government that the 457 visa scheme is being exploited.  They are voicing their concerns that with tougher restrictions on the 457 visas, will affect their businesses in fulfilling skill gaps in the Australian market.

Exemption threshold is being raised to $250,000

Prior to July 2013, if the nominated salary was above $180,000, nomination applications didn’t need to provide evidence that this salary is set according to a market salary rate.  Please note that this is still available for applications prior to 1 July 2013.

However, from 1 July 2013, this exemption threshold is being raised to $250,000 to ensure that higher paid salary workers are not able to be undercut through the employment of overseas labour at a cheaper rate.

How will I be affected?

How will the changes affect current 457 visa holders?

The Department of Immigration state that there should be no adverse effects on existing visa holders if they are doing the right thing.  However, any visa holders planning to change employment or seek a further 457 visa will need to be aware of the proposed changes.

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.

How will the changes affect Australian businesses?

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.

If the department is not satisfied that, based on the information provided, a nominated position is genuine, the market salary rate is equitable, or that an employer has considered whether there is an appropriately skilled Australian available to fill the vacancy, then the employer may be requested to provide additional justification before a nomination can be approved.