Overhaul of Australian Subclass 457 Visa Program

On September 14, 2009, the Australian government enacted legislation to reform temporary sponsorship visa applications (subclass 457 visa). The provisions contained in the Migration Legislation Amendment (Worker Protection) Act of 2008 drastically change the subclass 457 visa program and will, in turn, change the way Sponsors conduct business in Australia. Below is an overview of the changes to the subclass 457 visa program:

Changes to Sponsorship Obligations

• Equivalent terms and conditions of employment for Australian and non-Australian workers, including “market salary”—The Minimum Salary Level (MSL) or “prevailing wage” approach no longer exists. Instead, Sponsors must pay their subclass 457 visa holders the same wage they pay their Australian employees. Industrial arrangements (such as Collective Agreements) will help to determine the “market salary” for Sponsors that employ Australians in the same role and in the same location. However, for Sponsors who do not employ Australians in the same position and in the same location as their subclass 457 visa holder, evidence of what an Australian would receive in an equivalent position will need to be obtained.
• Removal of generic nominations—Sponsors will no longer be permitted to obtain multiple “slots” or generic nominations and are now required to identify the primary and secondary applicants on the application.
• Pay reasonable and necessary return travel costs—The request must be made in writing by either the visa holder or the Department of Immigration and Citizenship and the Sponsor must arrange for an economy-class plane ticket for the visa holder to their passport country within 30 days of the request.
• Ensure subclass 457 visa holder only works in the occupation approved.
• Sponsor may not recover or allow the subclass 457 visa holder/applicant to pay for any costs or fees associated with the sponsorship process and recruitment.
• Pay the location and removal costs of any unlawful subclass 457 visa holder, as requested by the Australian government, not to exceed AU$10,000.
• Notify the Department of Immigration and Citizenship within 10 working days of the following: cessation of employment of a subclass 457 visa holder; changes to business structure, location, or contact details; payment of return travel costs (as described above); and training changes for the subclass 457 visa holder.
• Maintain records for at least five years relating to the sponsorship application, duties of position, and location(s) where work was performed by the subclass 457 visa holder, payment of return travel costs, and evidence of the required notification(s) to the Department of Immigration and Citizenship as described above.
• Cooperate with Inspectors.
• Training—While the specific training requirements have not yet been announced, it is clear that all businesses that have been operating in Australia for 12 months or more will soon be required to provide evidence that they meet certain minimum training benchmarks as determined by the Department of Education, Employment & Workplace Relations (DEEWR) along with the Department of Immigration & Citizenship. Businesses that have been operating in Australia for less than 12 months will be required to demonstrate that they have tangible plans for meeting the requirements.

Penalties for Non-Compliance

Serious penalties—both monetary and non-monetary—could be imposed on both businesses and individuals in the event that they fail to comply with these new regulations. Financial penalties can be imposed at both the corporate and personal levels and will commence at AU$3,300 for the first offense.

In addition, administrative sanctions may be imposed, including the cancellation of sponsorship, barring of a company from filing future subclass 457 visa applications, and the inability to use other migration programs such as the Employer Nomination Scheme (ENS) for permanent residence applications in the event that a Sponsor is found to have committed fraud, provided misleading information, found to no longer be able to satisfy ongoing compliance, or to have violated the law.

Under the new regulation it will also be easier for the subclass 457 visa holder to take civil action against the Sponsor by virtue of suing them in court for money that is owed to them under these new obligations.

Health Insurance

Sponsors are no longer required to pay medical and/or hospital expenses arising from treatment the sponsored employee receives from public hospitals. Instead, it is now the sponsored employee’s responsibility, and that of their dependents (secondary visa holders), to provide evidence of health insurance for their duration of stay in Australia before the subclass 457 visa is granted. Failure to maintain health insurance could result in the cancellation of the visa.

Adverse Information

Sponsors are now required to disclose any adverse information which may deem them an unsuitable Sponsor. Details about legal proceedings or administrative action involving the Sponsor and any person or entity legally associated with the Sponsor over the past three years must be disclosed—including details of any convictions, findings of non-compliance with any law of the Commonwealth or a State or territory, any administrative action taken against the Sponsor, or any investigations or legal proceedings in connection with a breach of defined laws, such as: immigration, discrimination, industrial relations, occupational health and safety, and taxation.

Is Your Information Safe?

Information about the Sponsors and the visa holders that was once protected by the Privacy Act and the secrecy provision of the Taxation Administration Act can now be shared between the Sponsor and the visa holder, as well as with other government agencies, such as workplace safety, fair trading, education, and law enforcement. Details about a Sponsor’s compliance history and any adverse information (as discussed above) that the Sponsor provides may now be provided to the visa holder or any government agency that may inquire. Personal details about the visa holder, such as his/her residential address, telephone number, and email address, may also be disclosed.

Inspectors

Inspectors who were appointed under the Migration Act and Fair Work Inspectors now have the authority to enter a Sponsor’s premises at any time, for any reason, and without notice. They have the ability to interview any person, review any document, and inspect any work, process, or object they desire. In addition, they have the authority to make a written demand for Sponsors to produce records and documents within a specified timeframe. Failure to cooperate with Inspectors could result in financial penalties of up to AU$6,600 for an individual and AU$33,000 for a corporation.

English Language Proficiency

To ensure that all Australian workers are capable of responding to occupational health and safety risks, raising any concerns about their welfare with appropriate authorities, and benefiting Australia by sharing their skills with other workers, the requirement for demonstrating English language proficiency has become more stringent. All primary subclass 457 visa applicants must now score at least a “5” in each of the four test components of speaking, reading, writing, and listening of the International English Language Testing System (IELTS). The previous requirement was that applicants were required to average a “5” across all four test components.

Flexibility

While there are many new requirements under the new regulations that add complexity to the process, there are several benefits of the new program that will afford flexibility to both a Sponsor and subclass 457 visa holder. The minimum validity period (formerly three months) has been eliminated and a visa may now be granted for any period of time between one day and four years. In addition, subclass 457 visa holders may now change employers without needing to obtain a new visa, as long as the new employer is an approved Sponsor and the sponsorship application is approved. Finally, subclass 457 visa (primary and secondary) applicants may now apply from within Australia, while they hold a different visa classification (transit and special purpose visa holders are not afforded this benefit).

Where to Find Help

The Seyfarth Global Mobility Team (GMT) is a team of attorneys and paralegals with extensive experience in obtaining global visas and work permits in a multitude of foreign jurisdictions. The GMT provides employers with comprehensive immigration services for employees headed to foreign-country assignments. For more information about the visa and work permit options available (whether in connection with relocation of a single employee or of an entire business unit), please contact the Seyfarth attorney with whom you work, or any Business Immigration attorney on our website. We stand ready to assist you.