457 Temporary Work Visa Holders’ exploitation – don’t do it!

457 Temporary Work Visa
457 Temporary Work Visa
457 Temporary Work Visa
(image courtesy of Pixabay.com)

457 Temporary Work Visas are certainly a hot and political topic right now. As an example, last year’s Senate Education and Employment References Committee report slammed some fast food restaurants and the like as a ‘national disgrace’ for their purported exploitation of temporary work visa holders.

Sponsorship obligations and the regime more generally will apparently be toughened in response to this and other reviews into the program. So for that and other reasons, it’s never been so important to be aware of compliance issues when sponsoring overseas staff.

Potential changes ahead? Whilst nothing is definitive just yet, the senate committee and other reviews have proposed the following revised qualifying criteria to obtain a 457 visa:

  • The TSMIT (Temporary Skilled Migration Income Threshold) is proposed to be indexed to mirror average national weekly full-time wages. This threshold is currently set at $53,900.00;
  • Prohibition on the replacement of local workers by 457 visa workers (as long as there is localised availability);
  • Removal of labour market testing (‘LMT’) exemptions for ANZSCO Skill levels 1 and 2;
  • Professional/knowledge based employers will need to employ an Australian tertiary graduate on a one-for-one basis with 457 workers;
  • Trade based employers to have an apprentice cohort representing 25% of their workforce;
  • Employers will need to pay a $4,000.00 training levy per 457 visa holder.
  • The consequences of non-compliance with sponsorship obligations are proposed to be toughened;
  • A recommendation that positions are to be advertised for at least 4 weeks before hiring on a 457 and, amongst other things; 
  • Removal of most other LMT exemptions.

Why & how to stay compliant?
Breach of the current 457 sponsorship obligations can bring serious consequences for employers which include:

• Not being allowed to make any more applications;
• Cancellation of existing business sponsorship approvals;
• Potential to receive a significant penalty;
• Receiving an infringement notice; and, amongst other things
• The right of an employee to recover any underpaid amount as debt against the employer with interest.

So what are the obligations?

There are approximately eleven of these at present which relate to Standard Business Sponsors. One of the main obligations for nominations for UC 457 visas approved after 14 September 2009 is: The Standard Business Sponsor is under a strict obligation to pay the UC 457 holding employee a minimum of the appropriate market rate for the role and the amount the nomination was approved for (whichever is the greater).

So in other words, if your nomination for an overseas worker is approved, you cannot subsequently drop the person’s earnings less than the amount the Minister approved the application for. You also need to keep an eye out for ensuring what you are paying the relevant worker is at market rates on an ongoing basis.

What do you need to do?

On this particular obligation, not pay less than what the application was approved for. Also, if you have an equivalent local worker and you increase that person’s salary, you need to be mindful of your obligations towards the 457 holding overseas worker as well vis-à-vis market salary.

Compliance with this and all other obligations is carefully monitored by the Department of Immigration & Border Protection. This monitoring is likely to be toughened further given the latest report and recommendations. If you are caught being non-compliant, the consequences can be far reaching and costly.

Contact us today for a confidential discussion about how we can help.  

[email protected]     Phone: 07 3166 9100

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