Legislation to change the 457 visa program requirements enacted

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9 July 2013

BACKGROUND

The Migration Amendment (Temporary Sponsored Visas) Act 2013 (Amending Act) was introduced to enhance the government’s ability to deter alleged sponsorship behaviour which was inconsistent with the policy intent of the subclass 457 visa program. The government introduced the 457 visa program to allow employers to address skill shortages by supplementing the labour market with skilled foreign workers. The government’s rationale for the Amending Act is that employers are substituting foreign labour for domestic labour, thereby failing to invest in local training and recruitment and reneging on their commitments to remunerate foreign workers at the market rate and provide required training. The government claims that the result of employers exploiting the 457 visa program is that the labour market has struggled over the past few years, while the number of 457 visa holders has risen dramatically – from 68,400 in June 2010 to 106, 680 as at 31 May 2013. Whether the claims of large numbers of employers exploiting the visa system at the expense of the local labour market can be substantiated or the increase in 457 visa numbers since 2010 can be attributed to any significant impact on the labour market has been the subject of much speculation.

Amendments

Labour Market Testing

The Amending Act introduces a requirement for sponsors to undertake labour market testing before nominating a foreign worker for a nominated position. To satisfy the labour market testing condition the sponsor must: (i) provide evidence of the testing undertaken and (ii) provide information about any redundancies or retrenchments of Australian workers from that area of their business, or an associated entities business, in the four months preceding the nomination.

The sponsor must provide evidence that they have attempted to recruit Australian workers before nominating foreign workers. That evidence must include details of any advertising of the nominated position and the expenses paid (or payable) for that advertising. The sponsor may provide further evidence, such as information about their participation in career expositions, details of any expenses paid (or payable) for recruitment attempts or recruitment details. However, the Minister must not treat any nomination less favourably because the sponsor has elected to provide only the required evidence.

The Minister may in writing exempt a sponsor from the labour market condition in circumstances where a major disaster (natural or otherwise) has occurred and the exemption is necessary or desirable to assist in relief or recovery. The Minister may also legislate to specify certain highly skilled occupations. Sponsors will be exempt from the requirement to satisfy the labour market testing condition in relation to these specified occupations.

Amendment to the Migration Regulations 1994 (Cth) (Regulations)

The Amending Act requires the Minister to take all reasonable steps to ensure that regulations place certain obligations on sponsors, including obligations to: (i) pay visa holders at the market price and (ii) ensure that visa holders participate in their nominated occupation.

The Minister may accept written undertakings by sponsors that they will comply with their sponsorship obligations. Such undertakings may be withdrawn or varied with the written consent of the Minister. However, if an undertaking is in place and the Minister considers that the sponsor has breached that undertaking, the Minister may apply to the court for orders to remedy that breach.

The Amending Act empowers Fair Work Inspectors to exercise powers under the Migration Act and provides that an additional purpose for exercising inspector powers is to determine whether a sponsor has contravened a civil penalty provision in or committed an offence against relevant provisions of the Migration Act. 

Other Amendments

The Amending Act reinforces the purposes of div 3 pt 2 of the Migration Act.

The Amending Act also officially recognises the Ministerial Advisory Council on Skilled Migration, which provides advice to the Minister on the temporary sponsored work visa program, as a council established under the executive power of the Commonwealth.

Implementation

Schedule 2 of the Amending Act, which amends the Migration Act by inserting the labour market testing condition, will commence at the latest on 30 December 2013. From that date employers will have to undertake labour market testing before nominating foreign workers for nominated positions. Employers must compile all required evidence of their labour market testing and submit that evidence with their nomination, to ensure that the Minister will approve that nomination.

This will significantly increase the regulatory burden on businesses involved in engaging labour through the 457 visa program and will add to corresponding compliance and administration costs for all sponsoring employers.


The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.


Contacts

Heidi Roberts

Partner. Melbourne
+61 3 9672 3562

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Jack de Flamingh

Partner. Sydney
+61 2 9210 6192

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Janine Young

Partner. Melbourne
+61 3 9672 3254

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John Tuck

Partner. Melbourne
+61 3 9672 3257

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Nicholas Ellery

Partner. Perth
+61 8 9460 1615

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Stephen Price

Partner. Sydney
+61 2 9210 6236

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Ruth Nocka

Special Counsel. Sydney
+61 2 9210 6597

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Professor Anthony Forsyth

Consultant. Melbourne
+61 3 9672 3322

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