Changes to the 457 Program

Posted on July 30, 2013 by Emily

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The Federal Government introduced significant changes to the 457 program on 01 July 2013. Amidst growing political pressure about the growing prevalence of the 457 program, there was concern as to how this program was being utilised. The changes target three key areas:

  1.  Assessment of ‘skill’ in the Nomination process
  2. English requirement of the applicant at the time of application
  3. Changing the sponsorship entitlements of an approved sponsor
  4. Tightening the enforcement of sponsorship obligations

 

Assessment of ‘Skill’

  1. Department officials must now be satisfied that the visa applicant’s nominated occupation is ‘genuine’. Particular attention will be given to positions that seem to be ‘created’ for the purpose of facilitating a potential employee’s visa application.
  2. Skill assessments are now also required for generalist occupations. Applicants nominated for positions such as Program or Project Administrator or as a Specialist Manager not elsewhere classified must now undertake a formal skills assessment in order to be eligible to apply for these professions.
  3. After the approval of the application, Subclass 457 visa holders must now also obtain within 28 days any mandatory registration, licence or membership for their occupation in the state or territory they are employed.

English Requirements

English requirements for the 457 are now aligned with the English requirements for the ENS/186 permanent residency program. Unless exempt from this requirement, either due to the nominated salary or the education background of the individual, applicants must now achieve a score of 5 in each of the four components in IELTS.

Changing sponsorship entitlements

Sponsors must now indicate how many individuals it wishes to sponsor under its sponsorship application at the time of lodgement. A separate application needs to be lodged if the sponsor, after approval of its application, wishes to vary this number.

More significantly for start-up businesses , the term of sponsorship has been amended to an initial 12 months and all subclass 457 visa holders sponsored by a start-up businesses  will be limited to an initial 12 months.

Tightening the enforcement of sponsorship obligations

  1. The training requirements for sponsors will now be consistently monitored by the Department.
  2. The Minister now has a responsibility to ensure that certain sponsorship obligations are met. As part of this obligation, the Government’s capacity to monitor and investigate compliance with the 457 program has been expanded. Fair Work Inspectors are now able to exercise significant powers for the purpose of enforcing and monitoring the Migration Regulations. This will include ensuring that 457 employees are working in their nominated occupation and that they are being paid the market salary rates.

 

The reformed assessment process aims to ensure that those sponsored on the 457 visa are genuine employees, both in terms of the intent of the sponsor and the intent of the visa applicant. However, as was noted by Anne O’Donoghue, Immigration Solutions’ Principal Lawyer, at the Senate Inquiry May 2013 (you can access this article here), this is targeting a very small percentile of applicants. As was criticised by various commentators, skilled migrants provide a combination of technical skill, willing attitude, availability and demonstrable work ethic that the growing stringency of the regulations may neglect to recognise.

It is unclear whether the objective of the government to tighten controls over the 457 program will be capable of achieving its intended purpose in a small minority of cases or whether this regime, by increasing the legal complexity and financial costs, will deter skilled migrants and growing small businesses from contributing positively to the Australian economy.