One very common question that we get from 457 visa holders is – what should I be paid? I can’t tell you the exact amount that you should be paid. However, I can outline how you can determine the salary amount that you should be paid under migration legislation.
This article outlines the obligations that are imposed on sponsors / employers under Australian migration law in terms of salary payment for 457 visa holders. Hence, if your employer is not paying you this salary, they are in breach of migration law and the obligations that are imposed on employers / sponsors.
Before you ask what you exact salary should be, please note: this post pretty much explains that I can’t tell you what your exact salary should be. However, you should be able to work it out yourself by researching what your ‘equivalent terms and conditions of employment’ should be.
Equivalent terms and conditions – ‘Market Rate’ requirement
Your employer needs to demonstrate that your terms and conditions of employment are no less favourable than the terms and conditions which an ’equivalent Australian’ employee is or would be receiving. This includes showing that your ‘Guaranteed Annual Earnings’ (“GAE”) are at least equal to the Australian market salary rate for your role.
The sponsor must pay you the GAE that is specified in the nomination application or the ‘market salary rate’ as it varies over time, whichever is greater. This means that your sponsoring employer is obligated to periodically review your salary and increase it as the Australian market rate for your role increases.
Also, for an occupation to be sponsorable under a 457 visa, the Australian market rate for the role must be equal to or above the Temporary Skilled Migration Income Threshold (see below further explanation).
The nominating employer does not need to show that the ‘market rate’ requirement is met if the applicant’s GAE is $250,000 or greater. This is an exemption to this requirement.
What can be included in ‘Guaranteed Annual Earnings’
Guaranteed Annual Earnings (GAE) can only include the following types of payments and allowances:
- Your base wage
- Any payments which are applied or dealt with on your behalf or at your direction (e.g. your accommodation or housing allowance which your employer covers and pays directly to the landlord)
- The agreed monetary value of non-monetary benefits (e.g. health insurance, car, mobile phone and laptop etc.). This is just the agreed monetary value as agreed between yourself and your employer
The following cannot be counted towards GAE:
- Any payments or allowances which cannot be determined in advance such as commissions, incentive-based payments and bonuses, and overtime (unless the overtime is guaranteed)
- Compulsory superannuation contributions. Guaranteed contributions to superannuation that exceeds the contribution that is required under legislation can be counted towards GAE
Demonstrating the Australian ‘market salary rate’
Your sponsoring employer needs to demonstrate that the terms and conditions of your employment are no less favourable than the terms and conditions of employment that would be provided to an ‘equivalent Australian citizen or permanent resident’. This can be shown by providing a contract of an Australian citizen or permanent resident that is working in the same position and location as the role that you are nominated to perform for the purposes of the visa application.
Because the Department needs to compare ‘apples with apples’, there may be components of the equivalent Australian’s salary which need to be excluded. Since your employer can’t count bonuses, compulsory superannuation and payments which can’t be determined in advance in calculating your GAE, these types of payments can also be excluded from the equivalent Australian’s salary. Once your employer has excluded these types of payments, it can determine the minimum GAE that you must be paid.
Beyond looking at just the salary, the Department will also compare the equivalent Australian’s terms and conditions of employment and assess whether your terms and conditions are at least as favourable. This includes looking at various aspects of the employment contract such as the number of hours of work required, leave entitlements etc.
Relevant industrial award
Your nominated occupation may be governed by a relevant industrial award which will specify the salary that you should be paid. For example, a registered nurse working in Victoria will have his or her terms and conditions of employment governed by the Nurses Award 2010, including the salary that he or she should be paid.
You can be paid a salary that is higher than the level specified in the relevant award.
No equivalent Australian working
Your employer may not have an Australian citizen or permanent resident that works as an employee in the same role and location as your nominated role.
If this is the case, then your employer can provide evidence of what the Australian market salary rate is for your nominated role and show that your GAE is at least equal to the market rate. This is generally demonstrated by providing Australian market salary survey data. This data needs to be relevant to the nominated role and the location where you will be working (i.e. market salary data, such as Hays Salary Guides, will usually give specific data for various capital cities around Australia).
Finding appropriate market data for your role/industry
This is really just a matter of completing research. So here some of the resources that I use for finding market data:
The market data usually provides you with a range for the Australian market salary rate for a particular role (e.g. $70,000 to $85,000 per annum). If your GAE falls within this range, or is above it, then the market rate requirement is generally met.
You can also rely on job advertisements for similar roles in order to demonstrate the Australian market salary rate for the nominated role, as long as the advertisement relates to a role that is in the same location as the nominated role. You can use online advertising such as Seek, or local advertising such as newspaper advertisements.
What if your GAE is below the ‘market rate’?
Simply put, the nomination application may be refused if the equivalent terms and conditions of employment requirement is not satisfied. The case officer may contact your employer and let them know that this requirement is not met and ask them whether they would like to withdraw the application (or they may just refuse the application).
The Department may approve a nomination application where the applicant’s GAE is below the market rate. I have seen this happen when the difference between the applicant’s GAE and the market rate is relatively small.
Such nomination applications are always more risky because you are not satisfying one of the eligibility requirements. The employer can provide a statement which explains the short-fall between the applicant’s GAE and the market rate. The explanation can draw on things such as the applicant’s experience level, qualifications and/or skill set etc. But there is a very real possibility (and I would say likely possibility) that the Department will refuse such an application.
Temporary Skilled Migration Income Threshold
The Temporary Skilled Migration Income Threshold (‘TSMIT’) only applies to 457 visas. This threshold is set to ensure that all 457 visa holders have sufficient income to support themselves.
In order for your nominated role to be sponsorable under a 457 visa, your sponsoring employer needs to show that the Australian market rate for your role is at least equal to TSMIT (which is currently AUD $53,900 per annum). You will note that with this eligibility requirement (which is addressed as part of the 457 nomination application that your sponsoring employer prepares and lodges), the case officer is comparing the Australian market salary rate for the nominated occupation, not your actual salary, against TSMIT. If the market rate for the nominated role is below TSMIT, then the position itself is not sponsorable under a 457 visa.
Consequently, even if your (proposed) guaranteed annual salary is above the market rate and TSMIT, if the market rate itself is below TSMIT, then the position is not sponsorable. The 457 nomination application will be refused.
The Department generally increases TSMIT every year in accordance with inflation.
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