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Government passes 457 amendments despite business angst

AREEA policy adviser Luke Achterstraat with migration services manager Jules Pedrosa review Migration Act amendments passed through parliament last week, including the introduction of labour market testing and changes to the 457 visa program.

DESPITE ongoing lobbying efforts by AREEA, the Federal Government’s Migration Amendment (Temporary Sponsored Visas) Bill 2013 passed through both houses of parliament last week following negotiations with various cross-benchers.

Labour market testing (with some exemptions)

A labour market testing (LMT) requirement will be reintroduced into the 457 visa program and is due to take effect on 1 January 2014 (to allow employers a transition period). Under LMT, employers must provide details of job advertising (paid or unpaid) and relevant expenses paid (or payable) for that advertising in their 457 application.

Some exemptions to the LMT requirement will be made by the Minister for specific occupations within ANZSCO skill levels one and two (managers and professionals). However, so-called ‘protected occupations’ – engineers and nurses – will not be eligible to receive any exemptions. Significantly for the resource industry, this means all 457 visa applications to fill engineering positions must meet the labour market testing requirement. And no LMT exemptions can be made for skill level three occupations (trade and technical roles).

FWO inspectors

Greater scrutiny should also be expected as the bill empowers Fair Work inspectors (under the Migration Act) to monitor and enforce employer compliance with 457 visa sponsorship obligations. These powers include undertaking worksite inspections, interviewing employees and requesting pay slips and other records from employers.

The department currently has 34 dedicated inspectors and the bill extends their powers to the more than 300 Fair Work inspectors in force.

Increase in fees

As previously reported, the application fee for 457 visas has been doubled from $455 to $900.

Additional fees for the ‘dependants’ of the primary visa holders (i.e. spouse and children) have also been introduced. An additional $900 will be payable for dependants over age 18 and $225 for dependants under age 18.

For a comprehensive listing of the new visa applications charges payable to the Department of Immigration and Citizenship, please click here.

More time to seek renewed sponsorship

The bill also extends from 28 to 90 consecutive days the period in which 457 visa holders can seek new sponsors after the termination of their occupation and therefore sponsorship.

Sponsorship obligations

The bill enshrines into law the regulatory changes announced previously in February by Minister O’Connor: increased market rates threshold (from $180,000 to $250,000), stricter English language requirements and the requirement for ongoing demonstration of training.

The bill also introduces new restrictions for on-hire arrangements and limits the ability of employers to recover costs from visa holders.

Regulatory changes also significantly impact AREEA members with business sponsorships. Companies who hold business sponsorships must now consistently maintain the training benchmarks undertaken at the time of application and grant of their business sponsorship. Approved business sponsors must either meet training benchmarks A or B for the 3-year life of their valid business sponsorship, meaning the approved business sponsor must either:

  1. Spend at least1% of its company payroll on training its Australian employees; OR
  2. Contribute at least 2% of its company payroll to an approved Industry training fund.

Other regulatory changes included clarification regarding business sponsors employing 457 visa employees, as follows:

  • standard business sponsors must engage a Subclass 457 visa holder as a direct employee under a written contract of employment; and
  • Subclass 457 visa holders must work in a position in the business of the standard business sponsor and cannot be on-hired to work for another business. Where the business sponsor lawfully operates a business in Australia then the Subclass 457 visa holder may also work in a position in the business of an associated entity of the sponsor.

Additional regulatory changes

The Australian and New Zealand Standard Classification of Occupations (ANZSCO) listing determine which occupations foreign nationals can apply for under Australia’s skilled migration programme for temporary and permanent residency visas, and the new version has been released.

Other regulations ushered through on Monday are as follows:

  • All 457 visa applications must now be electronically lodged. Only when DIAC’s e457 visa lodgement fails, resulting in a foreign national becoming an unlawful non-resident, can a paper-based application be made to DIAC;
  • The Temporary Skilled Migration Income Threshold (TSMIT) applicable to 457 visa applications has increased from $51,400 to $53,900, meaning the minimum salary level an employer can pay a 457 visa applicant is $53,900 per annum in annual guaranteed earnings, excluding superannuation;
  • There are no longer any occupations-based exemptions to applications for 457 visas;
  • The country-based exemption has been removed. Those who hold passports from the United States, Canada, United Kingdom, Republic or Ireland or New Zealand are considered to possess vocational English; and
  • The level of salary for a 457 visa applicant to be considered exempt from English language testing has been increased from $92,000 to $96,400.

Other miscellaneous technical amendments adjusted wording and clarified provisions already in existence.

Further information

Some of these changes are technical in nature and AREEA’s registered migration agent, with specialist resource industry experience, is well equipped to explain the practical and operational implications of these changes to AREEA members.

AREEA Migration Manager Jules Pedrosa can be contacted in AREEA’s Sydney office on (02) 9211 3566.

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