Impending Changes to Australian Temporary Skilled Worker (457) Visa Program

The Australian Department of Immigration and Citizenship (DIAC) recently announced planned changes to the temporary skilled worker (457) visa program. The purpose of the program is to enable employers to temporarily fill vacant positions by recruiting qualified overseas workers where they cannot find appropriately skilled Australians. The program includes features that protect working conditions in the local labor market as well as measures to prevent exploitation of overseas workers.

While acknowledging that the 457 program is meeting its overall intent, the DIAC noted that it has concerns with its use by some employers. For example, in 2011-12 there was a significant increase in 457 applications from working holiday and student visa holders. Many of these 457 visa applicants were nominated to work in occupations and regions that were not experiencing widespread skills shortages, and in some industries they accounted for more than half of the total grants. The DIAC views this trend as indicative of program use driven by temporary visa holders trying to stay in Australia, rather than by real shortages of skilled labor.

On February 23, 2013, the DIAC announced a number of reforms "to strengthen the integrity" of the 457 program. The reforms will be implemented on July 1, 2013, and include:

• A requirement that the nominated position be a genuine vacancy in the business.
• A provision to allow the DIAC to take action against employer sponsors who engage in discriminatory recruitment practices.
• Strengthening the market salary rate requirements to provide discretion to consider comparative salary information for the local labor market when deciding whether a nominated position provides equitable remuneration. Additionally, the market salary exemption threshold will be increased from $180,000 (AU) to $250,000 (AU) to ensure that higher paid salaried workers are not undercut through employment of overseas workers at a lower rate.
• Strengthening the English language requirements for certain positions.
• 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 must be engaged on an employment contract (as opposed to an independent contractor) and not assigned to an unrelated entity unless they are sponsored under a labor agreement, or in an exempt occupation.
• Strengthening the existing obligation regarding recovery of costs to ensure that sponsors are solely responsible for certain costs.

The DIAC states that these measures should not adversely affect processing times and only have a minimal impact on business.

Less than one month after the DIAC announced its reforms, the Australian Senate initiated an enquiry into 457 visas and other migration programs. The purpose of the enquiry is to obtain multiple views on the 457 visa program. Submissions by interested parties will be accepted through April 26, 2013. People in companies utilizing the 457 program and other interested parties now have an opportunity to become involved and express their opinions on the program and the DIAC's proposed changes. Further information concerning submissions to the Senate, click here. 

The Faegre Baker Daniels immigration and global mobility team will address this topic and other global immigration reforms at our annual immigration seminar on May 7, 2013, in Minneapolis. Updates on Australia and other countries will be discussed during the Immigration Reform Around the World portion of the seminar.