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Employers and 457 visas – your obligations

457 Visa Sponsorship Obligations

16.05.2014

Australian employers hiring overseas staff on Temporary Work (Skilled) Visas – Subclass 457 visas – need to know the rules.


Demand for entry to Australia under the Temporary Work (Skilled) visa (subclass 457) program continues to grow. Its purpose is to address genuine skills shortages in the Australian labour market, without diminishing opportunities and conditions for local workers. It also aims to protect visa holders from exploitation.

In its recent budget announcements, the Coalition government has demonstrated its support for immigration that helps Australian employers to grow, by continuing to give top priority to skilled migrants.

A timely reminder

So we thought we would remind employers using the 457 visa program of their obligations, particularly as some of the rules have changed recently.

On the other hand, if you are new to the program and considering whether it could benefit your business, this quick tour can help you get your bearings. 

Although the government is looking to cut red tape for 457 visa applications and monitoring, there are penalties for non-compliance with the regulations.

What are employers’ main obligations?

All employers (called ‘sponsors’) using 457 visas need to keep up with the rules. The main obligations on sponsors are to:

  • Follow non-discriminatory employment practices
  • Cooperate with inspectors. This also applies for five years after the employer has ceased to be a sponsor.
  • Pay the market salary rate. Workers on 457 visas must receive the same pay and conditions, such as leave allowances and working hours, as an Australian worker for doing equivalent work in that locality.
  • Repay to the Commonwealth any costs involved in removing a worker from Australia. This obligation also continues for a further five years.
  • Keep records to show that you are complying with the rules. Again, this must be continued for up to five years after the sponsorship finishes. This has implications for how you pay salaries, for example, as cash payments are difficult to verify and are therefore discouraged.
  • Keep good records and keep the Department informed. There are obligations to notify the Department in writing of particular changes in your own circumstances or those of a current or former visa holder. Examples include cessation of employment, change to work duties, and insolvency or other changes to a sponsor’s legal status.
  • Provide training. In the past, meeting training benchmarks was a ‘commitment’. Now it is enforceable. And you must keep records.
  • Employ directly only – no contracting allowed. You must ensure that a visa holder does the work you have nominated (preventing, for example, on-hire to another business).

    There have been concerns that some sponsors are engaging visa holders more as independent contractors than in a direct employee–employer relationship. To prevent this, sponsors must keep copies of all contracts of employment and may not employ a person in a different occupation from the one approved by the Department.
  • Meet your own costs. The Department has tightened up to stop sponsors from trying to pass on costs, such as migration agent fees and recruitment expenses, to visa holders.

It can be complicated

Many employers need professional guidance to follow the rules of the 457 scheme. For example, the labour market testing obligations require familiarity with free trade agreements and other international obligations. English-language proficiency requirements have changed, as have the standards for sponsors demonstrating a genuine skill need and how many workers they require. Workers must now start work within 90 days of arriving in Australia, and only in the approved occupation.

Even if your company has a dedicated HR department or officer, their level of expertise may not be enough to keep up with all these changes. The expert advice of a specialist migration lawyer can help you. Talk to Haag Walker Lawyers today, and feel confident that you are meeting all your obligations.


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