The purpose of the 457 visa program is to enable employers to fill skill shortages by recruiting qualified overseas workers where they cannot find appropriately skilled Australians.
The 457 visa is a temporary visa, intended for filling short to medium term skill shortages, in a quick, flexible way to meet business needs. The program contains a number of in-built protections to prevent local workers' conditions from being undercut and overseas workers from being exploited.
The program was significantly reformed in 2009: why are further changes necessary?
The Worker Protection Act 2008 introduced a sponsorship framework which was designed to ensure the working conditions of sponsored visa holders meet Australian standards. These reforms have been largely effective in achieving their objective.
While the subclass 457 visa program is meeting its overall intent, there are external factors influencing program trends. The 457 program has expanded well above the national employment growth rate, and while most employers are using the subclass 457 appropriately, the nature of the program’s use by some employers indicates that the criteria is not being fully met.
Additionally, the Australian economy is very buoyant compared to many other countries, which makes us an attractive destination for people who may be facing high unemployment and low wages at home.
Within the program, significant growth was recorded in 2011-12 from applicants applying from onshore who held a working holiday maker visa or student visa. These subclass 457 visa applicants held mostly vocational qualifications, and in some industries accounted for over half of total grants. This trend suggests the program is being increasingly used by temporary visa holders seeking to remain in Australia instead of supplementing the Australian labour force.
What are the new measures?
On 23 February 2013, the Minister for Immigration and Citizenship announced a number of reforms to the subclass 457 program. These reforms are aimed at strengthening the Department of Immigration and Citizenship’s capacity to identify and prevent employer practices that are not in keeping with the criteria of the subclass 457 program.
The measures being brought forward include:
the introduction of a genuineness criterion under which the department may refuse a nomination if the position does not fit within the scope of the activities of the business
an increase in market salary exemption threshold from $180 000 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
the removal of English language exemptions for certain positions. Many long-term 457 workers go on to apply for permanent residence, and this change will ensure that the 457 program requirements are brought into line with the permanent Employer Sponsored program which requires a vocational English ability. This change will benefit visa holders by ensuring that 457 visa holders, who have an ongoing position with their employer and want to apply for permanent residence in the long-run are not disadvantaged because of their language ability. Applicants who are nominated with a salary greater than $92 000 will continue to be exempted from the English language requirement
enhanced regulatory powers for the department to ensure that the working conditions of sponsored visa holders meet Australian standards and that subclass 457 workers cannot be exploited or used to undercut local workers
amendments to existing training benchmark provisions to clarify that an employer’s obligation to train Australians is ongoing and binding for the duration of their approved sponsorship, including for newly established business
amendments to clarify that 457 workers may not be on-hired to an unrelated entity unless they are sponsored under a labour agreement
amendments which will allow the department to refund a visa application fee in circumstances where an employer nomination has been withdrawn.
What is the intent of these measures?
The Department of Immigration and Citizenship’s capacity to detect and respond to the integrity concerns is limited by current legislation. The new measures will strengthen the integrity framework without adversely affecting visa application processing times and ensure that the potential impact on business is minimised.
The measures will ensure the subclass 457 program better meets its overarching intent of acting as a supplement to, rather than a substitute for the Australian labour market.
The measures will also close loopholes in the current legislative and policy settings to ensure that the program can only be used by appropriately skilled persons and to fill genuine skills shortages. This will enable Australians workers to have fair and equal access to employment opportunities.
Further, the measures will strengthen the sponsorship obligations to ensure that the working conditions of sponsored visa holders meet Australian standards and that they are not exploited. Strengthening the sponsorship obligations will also provide further disincentive to use the program in a manner which was not intended.
When will the changes happen?
The comprehensive suite of measures will be introduced on 1 July 2013. In the lead up to the changes, detailed information will be made available to assist sponsors and visa holders and their representatives understand the new requirements.
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.
How will the changes affect current 457 visa holders?
There should be no adverse effects on existing visa holders if they are already doing the right thing. The 457 visa is a temporary visa, intended for filling short to medium term skill shortages, in a quick, flexible way to meet business needs. The Worker Protection reforms which took effect in September 2009 introduced a range of sponsorship obligations to ensure the working conditions of sponsored visa holders meet Australian standards and that they are not exploited.
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.
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