457 visa changes make sponsorship in Australia more difficult

The Department of Immigration and Citizenship (DIAC) has introduced a number of changes to the 457 visa program that will make it more difficult for businesses looking to sponsor overseas workers and individuals seeking employer sponsorship in Australia.

Along with the recently introduced powers of the Fair Work Ombudsman and Fair Work Inspectors to investigate sponsors, these changes continue the Federal government’s crackdown on the 457 visa program and are likely to result in increased enforcement and monitoring of sponsoring businesses. Previously sponsors were required to demonstrate that they had met sponsorship requirements in relation to training expenditure in the 12 month period before lodging an application. These new amendments clarify that businesses are required to continue meeting their training obligations throughout the entire term of the sponsorship approval. This is likely to increase the compliance burden on businesses using the 457 program, while changes to the English and skill requirements will affect individuals applying for 457 visas.

Importantly, the following changes affect all unfinalised applications, including applications lodged before 1 July 2013.

1.    Fees

The base application fee for new 457 visa applications has increased from $455 to $900. Significant additional fees also now apply for family members. The DIAC nomination fee has almost quadrupled to $330.

2.    Changes to income threshold and “market rate”

The minimum salary level for nominating a 457 position has been raised from $51,400 to $53,900. Nominations are exempt from the “market rate” requirement if the annual earnings are greater than $250,000.

3.    Employees must be engaged directly by the sponsoring business

The sponsoring entity must now engage the 457 visa holder as a direct employee under a written contract. If the sponsor lawfully operates another business in Australia, the 457 visa holder can still work in the business of an associated entity (but cannot be directly engaged by that business).

4.    ‘Genuineness’ test for nominations 

DIAC will now assess whether a nomination relates to a ‘genuine’ position required to address skills shortages in Australia. A nomination may not be considered ‘genuine’ where the nominee is a family member of the business owner, or where the nominated occupation appears unrelated to the purpose of the business.

5.    Nomination ceiling

Applicants for sponsorship approval are now required to propose the number of nominations  they are seeking access to. DIAC must consider the proposed number to be ‘reasonable’.

6.    Training requirements

Applicants for sponsorship approval now need to meet the DIAC ‘training benchmark’ throughout each year of the sponsorship.

Existing sponsors seeking to renew their sponsorship approval must now demonstrate that they have complied with their sponsorship and training obligations during the entire term of their sponsorship.

7.    English language requirements 

There are no longer any occupation based exemptions from the English language requirements for 457 applicants. All applicants are now required to demonstrate “Vocational English” (defined as a score of 5 or above on an IELTS test). Depending on the applicant’s salary, education or citizenship, they may be exempt from this requirement.

8.    Skills requirement strengthened  

457 visa applicants must now have the skills “that the Minister considers necessary to perform the tasks of the nominated occupation”. For applicants in generalist occupations, including Program or Project Administrator and Specialist Managers NEC, a formal skills assessment will now be required.

9.    Changes to 457 visa conditions

• 457 holders must now commence work within 90 days after their arrival.
• 457 visa holders who cease employment will now have 90 days in which to find a new sponsor, apply for another visa or depart Australia.
• Amendments to introduce ‘labour market testing’ have now passed the Parliament, but it is unclear when these amendments will take effect.