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Australia – Changes to Temporary Skilled Work 457 Visa

Australia – Changes to Temporary Skilled Work 457 VisaOn 6 June, the Minister for Immigration and Citizenship tabled in Parliament the Migration Amendment (Temporary Sponsored Visas) Bill 2013. This bill, together with proposed amendments to the Migration Regulations 1994, presents a significant package of reforms, the most notable of which are outlined below. It is anticipated that, if passed, these reforms would commence on 1 July 2013.

Labour market testing of a subclass 457 visa position

One of the most significant elements of the changes announced on 6 June was the reintroduction of labour market testing. It is anticipated that this requirement would not become active until January 2014 and there would be high-skill level exemptions available to labour market testing. As part of the process, business sponsors would need to provide specific evidence at the time of nominating the position to be filled by a foreign national, including:

  • Attempts made to recruit suitably qualified and experienced Australian citizens or permanent residents. Examples may include:
    • Advertising of the position
    • Information about participation in job and career expositions
    • Details of expenses connected to recruitment attempts
    • Details of the results of recruitment attempts, including any position filled as a result of these attempts
  • Information relating to research released in the previous six months relating to labour market trends generally and, specifically, in relation to the nominated occupation
  • Support from Commonwealth, State and Territory government authorities with responsibility for employment matters
  • Any other type of evidence determined by the Minister in a legislative instrument.

The proposed exemptions to labour market testing include:

  • In cases of major disasters, where the Minister determines that a government response is required and an exemption is required to assist disaster relief or recovery
  • Where a relevant bachelor degree and/or five years’ experience is required for the nominated position and the nominated occupation is included on a gazetted occupational list
  • Where a relevant associate degree, advanced diploma or diploma covered by Australian Qualification Framework AQF and/or three or more years of relevant experience is required for the nominated occupation and the nominated occupation is included on a gazetted occupational list.

Increase in the time for a 457 visa holder to secure new sponsored employment

Currently, where a foreign national sponsored by an employer for a 457 visa in Australia ceases employment with their sponsor, the visa holder has 28 days from ceasing employment to either apply for a new visa, or to depart from Australia. Under the bill, there would be an increase in the timeframe allowed for a 457 visa holder to find a new sponsor from 28 days to 90 days. 

Empower Fair Work Inspectors

The Australian Government has previously announced an increase in the number of Fair Work Inspectors. The legislation tabled before Parliament details how Fair Work Inspectors would be empowered under the Migration Act to investigate and enforce compliance with sponsorship obligations.

Sponsorship obligations and new enforceable employer undertakings

In conjunction with increased workplace inspector numbers, the enforceable undertakings on sponsors (employers) would allow the Department of Immigration and Citizenship (DIAC) to act on issues of non-compliance. Furthermore, sponsors who have been found to be non-compliant with the undertakings might have their details published on DIAC’s website.

Currently, the Minister can bar a sponsor from doing certain things or cancel the sponsorship. From 1 July, the Minister would have additional powers including the ability to:

  • Apply for an order from a court directing a sponsor to comply with an undertaking, or to pay the Commonwealth the amount of any financial benefit gained from a breach, or to pay compensation to another person who suffered loss or damage as a result of a breach.

The sponsorship obligations include:

  • Paying a market salary rate to a visa holder
  • Paying prescribed costs to the Commonwealth in relation to locating a former visa holder, and removing a former visa holder from Australia
  • Paying prescribed costs of the departure of a visa holder (or a former visa holder) from Australia
  • Complying with prescribed requirements to keep information, and provide information to the Minister
  • Notifying DIAC of prescribed changes in the circumstances of an approved sponsor, a former approved sponsor, a visa holder or a former visa holder
  • Cooperating with inspectors
  • Ensuring that a visa holder participates in an occupation, program or activity nominated by an approved sponsor (including by preventing the on hire of a visa holder)
  • Requiring an approved sponsor or former approved sponsor not to transfer, charge or recover certain costs
  • Requiring an approved sponsor or former approved sponsor to meet prescribed training requirements.

Deloitte’s view

The re-introduction of labour market testing to the Temporary Skilled Work 457 visa program is regrettable, and may create substantial issues for employers who nominate positions that are required to provide this evidence. Unfortunately, this may include delays in 457 visa issuance, which in turn could have an impact on businesses which need to mobilise labour quickly in Australia. It would be prudent to carefully examine the recruitment efforts undertaken by sponsors to fill positions in Australia, and use such information in support of relevant 457 visa applications. We encourage all business sponsors to closely review the occupations they plan to nominate over the next six months and start to gather the evidence required.

The additional legal powers contained in the legislation increase the need for employers to be aware of their obligations when employing foreign nationals and to ensure that appropriate risk management processes are implemented.

We also encourage all sponsors to closely review the systems and processes they have in place in regard to the sponsorship obligations.


If you have any questions concerning the issues in this GES NewsFlash, please contact one of the GES professionals at our Deloitte offices at the right hand side of this page.

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