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 that the working conditions of sponsored visa holders meet Australian standards.

These reforms introduced amendments to  Australia’s temporary skilled migration programs to ensure that they:

  • are simple for Australian sponsors, employers and visa holders to understand
  • have streamlined sponsorship and nomination arrangement with reduced red tape
  • do not permit exploitation of workers from overseas
  • include equitable remuneration arrangements
  • ensure that Australian workers are not disadvantaged.

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 these objectives of the program are not being fully met.

Within the program, significant growth in applications was recorded in 2011-12 from working holiday maker and student visa holders. Many of these subclass 457 visa applicants were nominated to work in occupations and regions which are not experiencing wide spread skills shortages, and in some industries they accounted for over half of total grants. This trend suggests that usage of the program is being increasingly driven by temporary visa holders seeking to remain in Australia instead of the demands of 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:

  • introducing a requirement for the nominated position to be a genuine vacancy within the business.  Discretion will be introduced to allow the department to consider further information if there are concerns the position may have been created specifically to secure a 457 visa without consideration of whether there is an appropriately skilled Australian available.
  • introducing a provision to allow the department to take action against sponsors who engage in discriminatory recruitment practices.
  • strengthening the market salary rate requirements to provide discretion to consider comparative salary data for the local labour market when deciding whether a nominated position provides equitable remuneration arrangements.  Additionally, the market salary exemption threshold will be increased 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.
  • strengthening the English language requirements by removing exemptions for applicants from non-English speaking backgrounds who are nominated with a salary less than $92 000 and requiring applicants who were exempt from the English language requirement when granted a visa to continue to be exempt from, or to meet the English language requirement when changing employers. Additionally, the definition of English language will be better aligned with the permanent Employer Sponsored.
  • strengthening the requirement for sponsors to train Australians by introducing an ongoing and binding requirement to meet training requirements for the duration of their approved sponsorship.
  • clarifying that 457 workers may not be engaged in unintended employment relationships by requiring workers to be engaged on an employment contract (as opposed to a business contract for services) and not on-hired to an unrelated entity unless they are sponsored under a labour agreement, or in an exempt occupation.
  • strengthening the existing obligation regarding recovery of costs to ensure that sponsors are solely responsible for certain costs.

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 capacity to monitor sponsors be enhanced?

On 18 March 2013, the Minister for Immigration and Citizenship, Mr Brendan O’Connor MP, together with the Minister for Employment and Workplace Relations, Mr Bill Shorten MP, announced that the power to investigate compliance with sponsorship obligations will be extended to the Fair Work Ombudsman (FWO), to ensure that subclass 457 workers are employed in their nominated occupation and are receiving market salary rates.

These changes will empower Fair Work Inspectors to monitor key aspects of employers' compliance with sponsorship obligations, namely:

  • whether Subclass 457 visa holders are being paid the market rates
  • if the job being done by the Subclass 457 visa holder matches the job title and description approved in their visa.

Currently the Department has 34 active inspectors to investigate sponsors' compliance with the sponsorship obligations.  In 2011-12 there were over 22 000 active sponsors of Subclass 457 visa holders. The FWO currently has over 300 appointed inspectors across the country. Their appointment as inspectors under the Migration Act 1958 (Migration Act) will substantially expand the sponsor monitoring inspectorate, and the government's capacity to monitor the Subclass 457 program. 

This will have the effect of significantly improving the coverage of sponsor monitoring and will send a strong signal to sponsors doing the wrong thing that they must fulfil their sponsorship obligations. The alternative is to risk facing administrative sanctions, being issued with an infringement notice or possible civil action.

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.

If the department is not satisfied that, based on the information provided, a nominated position is genuine, the market salary rate is equitable, or that an employer has considered whether there is an appropriately skilled Australian available to fill the vacancy, then the employer may be requested to provide additional justification before a nomination can be approved.

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. However, visa holders should note the changes to English language requirements if they plan to change employment or seek a further 457 visa.

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.

What affect will the changes have on addressing real skills shortage problems?

Where employers can demonstrate a genuine need for skilled workers from overseas, they will still be able to sponsor people to fill skills gaps. Employers who make genuine attempts to open job opportunities up to Australians, who pay appropriate market rates and who are committed to the ongoing training and up-skilling of Australians will still have access to the subclass 457 program to supplement their skilled workforce.

What current incentives are there to encourage employers to employ Australians first?

Before an Australian business is able to sponsor an overseas skilled worker on a Subclass 457 visa, they:

  • must attest to a strong record of, or a demonstrated commitment to employing local labour and non-discriminatory employment practices
  • demonstrate a financial commitment to training Australians.

Before a position in a business can be filled with an overseas worker, the sponsor must:

  • certify that it is suitably skilled and the qualifications and experience of the visa holder are commensurate with those that would be required of Australians employed in the nominated occupation
  • demonstrate that the terms and conditions of employment are no less favourable than those provided to Australians to perform equivalent duties in that particular workplace or the local labour market. 

All Subclass 457 visa holders nominated in trade occupations must demonstrate that they have the skills, qualifications and experience to perform the occupation for which they are nominated and have sufficient proficiency in the English language.  Many are required to undergo a formal skills assessment.

Sponsors are required to conform with sponsorship obligations and incur a financial and administrative cost in lodging applications to sponsor and nominate foreign workers and paying any overseas recruitment costs, as well as incurring a liability for return travel costs for 457 workers who they employ.

Action may be taken if a sponsor is found not to have met their obligations. This action may include removing the sponsor's access to the program, imposing a financial penalty in the form of a civil infringement or applying to the courts to determine an appropriate penalty under civil litigation provisions.



"Choosing the right migration consultant is difficult.  I consulted with many Migration Agents, but Opal Consulting impressed me a lot.  I applied for a visa for my husband, which was rejected.  After some time my friends suggested that I try "Opal Consulting".  I was amazed with their professionalism and the way they arranged my documents. They kept me up to date throughout the whole process.  We got the visa after 3 months. Yeah!  Finally I was so happy to see my husband after 3 years and with hard struggle."

Regina Shrestha

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