March 06, 2013

A February 23, 2013 media release by Australia’s Minister for Immigration and Citizenship, the Honorable Brendan O’Connor MP, announced undefined changes to the Subclass 457 Visa category. These proposed changes are designed to “strengthen the integrity of the 457 program.”

What’s Changed?

Australia’s Department of Immigration and Citizenship (DIAC) is taking steps to increase its oversight of corporate sponsors submitting Subclass 457 Visa applications on behalf of foreign workers.

On or after July 1, 2013, the DIAC anticipates making changes on how on-shore and off-shore sponsors identify and choose overseas workers to fill truly critical or shortage occupation skills. According to recent guidance provided by the DIAC to the Migration Institute of Australia (MIA), the general, proposed changes are as follows:

  • Employers must demonstrate that they are not nominating positions where a genuine shortage does not exist;
  • The English language requirements for certain positions will be raised;
  • The enforceability of existing training requirements for businesses that use the program will be strengthened;
  • The market salary exemption will rise from AUD$180,000 (approx. US$183,798) to AUD$250,000 (approx.US$255,575);
  • On-hire arrangements of 457 Visa workers will be restricted;
  • Compliance and enforcement powers will be beefed up to stop employers who have routinely abused the 457 system;
  • Stakeholders will be consulted to ensure market rate provisions more effectively protect local employment.

As of February 26th, the DIAC’s website also provided additional, expanded information regarding these changes (http://www.immi.gov.au/skilled/strengthening-integrity-457-program.htm).

Please note that as the Minister’s announcement is the policy, the DIAC is charged with finalizing regulations and implementing them accordingly. Most of these changes are expected to be introduced on July 1, 2013.

ACTION ITEMS FOR EMPLOYERS

At present, no actions items are intended for either on-shore or off-shore employers.

The changes are designed to prevent many known abuses that are currently not illegal but that are not in keeping with the intent of the program. Such known abuses include:

  • Companies that employ a staff consisting entirely of Subclass 457 visa holders and that have made no attempt to employ Australian citizens or permanent residents;
  • The sponsorship of a person whose nominated occupation is generic (e.g., a Project Administrator), but who is actually engaged in a different occupation (e.g., a trade);
  • Artificial market salary rates within a company.

While the Minister does not intend to remove genuinely required generic occupations (e.g., a Project Administrator, Marketing Specialist) from the program, there may be an increased skills assessment or English requirement for these occupations.

The increase in the market salary exemption from AUD$180,000 to AUD$250,000 is designed to prevent Australian citizens or permanent residents in occupations where the market salary is $250,000 or higher from being replaced by Subclass 457 visa holders who can be paid $180,000. Case officers are likely to be given a discretionary power to make investigations of market salary rate beyond what is paid in an individual company.

In general, the DIAC believes that genuine users of the Subclass 457 visa program who are not trying to use if for purposes for which it was not intended will not be affected by the changes.

Caveat Lector | Warning to Reader

This is provided as informational only and does not substitute for actual legal advice based on the specific circumstances of a matter. Readers are reminded that Immigration laws are fluid and can change a moment’s notice without any warning. Please reach out to your local Pro-Link GLOBAL specialist should you require any additional clarification. This alert was prepared by Glenn Faulk, Senior Manager, Knowledge Management. Pro-Link GLOBAL worked with our PLG | KGNM Correspondent Office in Australia to provide you this update.

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