Proposed Changes to Subclass 457 visa – Reform to be introduced 1 July 2013

Changes to Subclass 457 visa

The Minister for Immigration & Citizenship, the Hon Brendan O’Connor MP, has announced some major changes to the subclass 457, Temporary Work (Skilled), visa program.  While the Minister’s statement presents changes to Immigration policy the Department of Immigration & Citizenship (DIAC) is still finalizing the details of the legislative.  Most changes are expected to be introduced on 1 July 2013.

The debate looks set to continue for some time yet, especially in the rub up to the federal elections later this year, but the government have acted first with Treasurer Wayne Swan announcing in his most recent Federal Budget that the cost of a 457 visa will be increased to AU$900 (£580) in July.

(Please note we have an updated article on the Latest updates on the 457 visa scheme, you can access it by clicking here)

A summary of the Minister’s announcement is as follows:

–          Employers must demonstrate that they are nominating a position where a genuine skill shortage exists

–          Higher English language requirements for certain positions

–          The enforceability of existing training requirements for businesses will be strengthened

–          An increase in the market salary exemption from $180,000 to $250,000

–          On-hire arrangements of 457 Visa workers will be restricted

–          An increased focus on compliance to stop employers who routinely abused the 457 system and strengthen the infringement system.

–          Stakeholders will be consulted to ensure market rate provisions more effectively protect local employment

These changes take into account the needs of employers and that of the Australian domestic labour force. The Minister acknowledges that in some industries and regions there is a genuine skill shortage that can only be addressed by the use of temporary foreign labour, through the 457 visa program. However, as the growth of the 457 program has come out of step with those skill shortages and there is evidence that some employers are discriminating against locals.  The Australian government has decided to introduce changes to the 457 program to give Australian workers “a fair go”.

Whilst the exact scope of the legislative changes remains unclear DIAC has provided the Migration Institute Authority (MIA) with the some further information as to the changes that will take place. DIAC has stated that the changes are designed to prevent known abuses that are not currently illegal but are not in keeping with the purpose of the 457 program.

These abuses include:

–          Companies that employ solely subclass 457 visa holders and make no attempt to employ Australian citizens or permanent residents

–          Companies that sponsor a person under a generic occupation (e.g. Project Administrator) when that person is actually engaged in a different occupation (e.g. a trade)

–          Creating artificial market salary rates within a company.

While the Minister does not intent to remove genuinely required occupations (e.g. Marketing Specialist or Project Administrator) from the 457 program, as a result of the abuses outlined above, there may be an increased skills assessment or English requirement for these occupations.

The increase in the market salary exemption from $180,000 to $250,000 is designed to prevent Australian citizens or permanent residents in occupations where the market salary rate is higher than $250,000 from being replaced by subclass 457 visa holders who can be paid $180,000 without investigation.  DIAC is likely to address this problem by giving case officers a discretionary power to make investigations into market salary rate beyond what is paid to an individual company.

For the latest updates on proposed changes to the 457 Visa click here

DIAC’s website has now been updated to include further information on these yet undefined changes, Click here.