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by Costa Brehas

On September 14, 2009 important changes took place to the rules relating to sponsoring workers in Australia under a Subclass 457 visa.

Amongst the more interesting features are the following:

‘Market Salary Rates'

Under the ‘old' rules employers were obliged to pay s457 visa workers at least a specified minimum salary for their applicable occupation.

Under the new rules, s457 visa workers must now be paid ‘market salary rates'. This is a bit of a misnomer as these rates are not determined by the market place. Instead, they are, as a general rule, determined as follows:

1. By the industrial arrangements and rates of pay that the sponsoring employer pays to an equivalent Australian worker employed at the same place where the s457 visa worker will work.

2. If the sponsoring employer does not employ any equivalent Australian worker at that place then the market salary rate may be determined by any industrial arrangements (such as collective agreements or awards) that apply to the position which the s457 visa worker will fill.

3. If there are no industrial arrangements that apply to that position then the sponsoring employer may refer to other data, such as salary surveys, to determine the applicable market salary rate.

If, in any of the circumstances referred to above, the salary to be paid will be less than an indexed threshold, known as the Temporary Skilled Migration Income Threshold (TSMIT), (which is currently $45,220 p/a), the nomination will, in most cases, be refused. This will be the case even if the proposed employer offers to pay the employee above the TSMIT.

For example: Applying the rule in 1. above, if the salary of an equivalent Australian worker is $44,000 p/a this will be the ‘market salary rate'. Even if the proposed employer offers to pay to the s457 visa worker a salary of $65,000 p/a, the nomination will probably be refused because the "market salary rate" is below the TSMIT.

The market salary rate requirement referred to above will, however, not apply where a s457 visa worker is paid a salary of $180,000 p/a or above.

Employers who already employ s457 visa workers under the ‘old' rules can continue to pay those workers under the ‘minimum salary level' that applied to those workers until the end of year. From January 1, 2010, however, they must comply with the new rules.

Medical Insurance

Unlike the ‘old' rules, s457 visa workers must now obtain their own medical insurance in order to get their visa and must continue to maintain that insurance for as long as they stay in Australia.

Changing Employers

Subclass 457 visa workers who wish to change employers can now do so without having to apply for a new s457 visa each time they do so. Their proposed new employer merely needs to lodge an application nominating them. The worker can then move to the new employer after this application is approved.

New Employer Liability

The sponsoring employer is liable to pay the government up to $10,000 in respect of its costs for finding a s457 visa worker who has breached the terms of his or her visa and removing that worker, together with any other people who accompany him or her, from Australia.

Costa Brehas (B.Proc – University of the Witwatersrand, South Africa) practised as an attorney and conveyancer in South Africa and is currently engaged as a senior advocate in the Employment and Workplace Relations Department of Hunt & Hunt.

Disclaimer: The information contained in this article is not legal advice and should not be relied upon as legal advice.

Posted in business |
Posted by Costa Brehas
10 Dec 2009

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