The legislative changes have made it more difficult and complex to sponsor applicants for the Subclass 457 visa.
We have outlined the most significant changes that impact 457 visa applicants/holders, and sponsors/employers.
Changes that impact Subclass 457 visa applicants & holders
English language requirement & IELTS testing
Under the previous legislation that applied prior to 1 July 2013, evidence of English language ability was generally only required for applicants that are applying for trade and technician occupations (e.g. cook, plumber, electrician etc.).
Under the legislation that came into effect on 1 July 2013, applicants will be required to demonstrate ‘Vocational English’ unless one of the below exemptions apply. ‘Vocational English’ is defined as a score of 5 or above for all four components on an IELTS test (can be Academic or General Training Modules), or a score of at least “B” in each of the four components of an OET. The test must also be conducted in the 3 years immediately before the day on which the application was made.
You do not need to satisfy the above English requirements if you are covered by one of the exemptions below:
- Holders of passports from the UK, Ireland, USA, Canada or NZ
- Where the base salary is at least $96,400
- Where the applicant has completed 5 consecutive years of study in English at a secondary education level or higher
Demonstrating that the applicant has the required qualifications or experience
New Clause 457.233(4)(da) has been inserted into Schedule 2. Subclass 457 visa applicants are now expressly required to demonstrate that they have the skills, qualifications or experience that is required under ANZSCO.
Previous positions required that further information be requested to address a case officer’s concerns in relation to the applicant’s qualifications or experience before a visa application can be refused. Under the amended Schedule 2, DIAC may refuse a visa application without requests for further information. It is now very important to try and lodge complete and decision-ready applications.
Skills assessments required for more occupations
From 1 July, skills assessments are required for two occupations of concern to DIAC:
- Program and Project Administrator (ANZSCO 511112), and
- Specialist Manager not elsewhere classified (ANZSCO 139999)
Applicants nominated in these positions are required to undertake formal skills assessments from VETASSESS regardless of their nationality. The eligibility requirement to obtain a positive skills assessment for these two occupations are listed here.
Ceasing employment as a 457 visa holder – Condition 8107
If an employee terminates employment with their current sponsor and employer, they have 90 days to be sponsored by a new employer before they will be considered in breach of the 8107 condition (increased from the previous 28 days).
Also, as a change to condition 8107, as a 457 visa holder you must commence work within 90 days of arrival in Australia.
Changes that impact employers / sponsors
Increases to application fees
A summary of the new fees are as follows:
|Standard Business Sponsorship||$420|
|457 Dependent (Over 18)||$900|
|457 Dependent (Under 18)||$255|
|Onshore Extension (per applicant)||$700|
The Temporary Skilled Migration Income Threshold (TSMIT) has been increased to $53,900. 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 (AUD $53,900 per annum).
Increased salary level thresholds
As mentioned above, the salary threshold for the waiver of the English language requirement has been increased to $96,400 per annum.
Your employer also 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 salary is at least equal to the Australian market salary rate for your role.
The nominating employer does not need to show that the market rate requirement is met if your guaranteed salary is $250,000 or greater (increased from $180,000).
Caps on the number of 457 applicants that can be sponsored
Previously, Standard Business Sponsors had no limit on the number of employees they could sponsor for 457 visas.
Sponsors will now need to specifically declare the number of applicants that will be sponsored for 457 visas. According to the requests that I am receiving from case officers, sponsor are asked the following:
Please advise how many job positions you intend to nominate to be filled by primary sponsored persons during the lifetime of the standard business sponsorship agreement (maximum 3 years).
Please provide a detailed explanation which outlines your reasons for proposing this number.
Our understanding is that once the cap is reached (i.e. the sponsor has sponsored the number of 457 visa applicants that DIAC approved for the purposes of the Standard Business Sponsorship application), the sponsor will need to lodge a new Standard Business Sponsorship application before it can sponsor any more 457 visa applicants.
Consequently, Standard Business Sponsorship is valid until the cap is reached, or until the Standard Business Sponsorship expires – which ever of these two events which occurs first.
Compliance with sponsorship obligations
If an employer previously held Standard Business Sponsorship, and this employer is applying for Standard Business Sponsorship again, then as part of the current application, DIAC can ask the employer to provide evidence and demonstrate that it complied with its obligations when it last held Standard Business Sponsorship.
The Migration Regulations 1994 now expressly states that the employer needs to provide evidence to demonstrate satisfaction of the ‘training benchmark’ requirement.
We have a client which held Standard Business Sponsorship between September 2009 and September 2011. This employer recently applied for Standard Business Sponsorship in July 2013. DIAC has asked for evidence to demonstrate the employer satisfied the ‘training benchmark’ requirement during the previous period that it held Standard Business Sponsorship. We will now need to obtain Financial Statements, Business Activity Statements and training cost receipts for the relevant period.
There is a slight change with how an employer needs to comply with the training benchmark requirement. The sponsor will now need to demonstrate compliance with the training benchmark requirement for each 12 month period from the approval of sponsorship. For example, if you are granted sponsorship on 1 January 2010 for a period of 3 years, you will need to demonstrate compliance with the training benchmark requirement for each year of approval of sponsorship (i.e. 1 January to 31 December for each year from 2010 to 2012).
Employers will also need to keep records of training expenditure / evidence of internal training. If an employer does not meet the training benchmark, they may not be approved for an extension or variation of their sponsorship (and could face fines or cancellation of their approval).
Recently established businesses
A recently established business is one which has been in operation for less than 12 months. If the sponsor falls into this category and DIAC approves this sponsor’s application for Standard Business Sponsorship, this approval is only valid for 12 months.
In addition, the 457 visa granted to employees of such a ‘recently established business’ will be valid for only 12 months compared to the usual 4 years.
For businesses that have been operating for 12 months or more, the sponsorship approval period should be 3 years from the date that the sponsorship is approved (or until the cap is reached for that particular business).
Genuineness test implications
Assessing whether the role is genuine will now be assessed as part of the Subclass 457 nomination application. Prior to the legislative changes on 1 July 2013, when assessing a Subclass 457 nomination application, case officers had no ability to verify whether the nominated occupation is ‘genuine’ and necessary for the sponsor’s business operations.
Case officers can consider whether the nominated occupation and the duties of the role correctly aligns with an occupation that is eligible and sponsorable under the 457 program and whether it is compatible with the nature and scale with the sponsor’s business demands.
Changes to compulsory Superannuation Guarantee Levy
From 1 July 2013, the compulsory Superannuation Guarantee Levy payable by employers increased from 9% to 9.25% with a view to a final increase in stages to 12% by 1 July 2019.
Sponsors should ensure that, despite any increases in superannuation contribution, the employee is not paid at a GAE level less what is stated in their nomination application.
Labour market testing
Labour market testing (LMT) has been re-introduced to the 457 visa program through the Migration Amendment (Temporary Sponsored Visa) Act 2013. The Minister has not finalised the details of this requirement in guidelines nor has yet to set the date when this requirement is to commence although it should be introduced by the end of the year.
Broadly, LMT requires:
- Sponsors must include, with their nominations, a job advertisement of the nominated position within 4 months of the date of the nomination
- Sponsors must also provide additional evidence that they have “tested” the market for labour, for example, participation at career’s fair
- The Minister can make certain occupations exempt from LMT for example skill level 1 and 2 occupations. However, LMT must be set for nominations in the engineering or nursing occupations
There are a host of other changes, including:
- All 457 applications must now be lodged online, with no paper applications possible; and
- Measures and increased monitoring by government departments to ensure compliance with sponsorship and visa obligations.
How we can help and our professional fees
Our professional fee will be dependent on the complexity of the applications:
- Standard Business Sponsorship application: $2,000 - $3,000
- Subclass 457 visa and nomination applications: $2,000 - $3,000
- Review of prepared application prior to lodgement: $1,000 - $2,000
With our clients, we do commence the process by completing a thorough eligibility assessment.
See the feedback that we have received from our clients.