Chamber of Commerce Queensland and Industry Queensland

All businesses employing overseas workers under the Subclass 457 visa program, as well as those employers looking to use the program in the future, need to be aware of the recent changes announced by the Minister for Immigration and Citizenship, Senator Chris Evans.

Chamber of Commerce and Industry Queensland (CCIQ) is currently working with the Department of Immigration and Citizenship (DIAC) to set up a series of information sessions to brief employers on these changes. Details will be advised shortly.

In short, from Monday 14 September overseas workers on 457 visas must be paid at market salary rates. It will be the employer's responsibility to demonstrate to DIAC what the market salary rate is for the nominated occupation prior to a visa being granted. Transitional arrangements will apply for employers already employing workers on this visa.

A new threshold, known as the Temporary Skilled Migration Income Threshold, will also be implemented. Any applications under the Subclass 457 visa program will not be approved if the market salary rate for the nominated occupation is below this threshold, which is currently set at $45,220.

All of these additional obligations fall under the Migration Legislation Amendment (Worker Protection) Act 2008 (and associated regulations). The new laws also give more investigative powers to DIAC officers to monitor workplaces and conduct site visits to determine whether employers are complying with the new obligations. Employers found to be in breach of the obligations could be fined up to $33,000 and the department may cancel an employer's approval as a sponsor or bar them from making further applications for overseas workers.

Chamber of Commerce & Industry Queensland (CCIQ) will work with DIAC to ensure our members are supported throughout the transition period.

Market salary rates

The introduction of market salary rates means that employees on Subclass 457 visas granted on or after the 14 September 2009 must be paid at these rates, including current applications in progress with the department.

Employers will need to demonstrate what the market salary rate is for the nominated occupation.

Where there is an equivalent Australian worker in the same workplace, the market rate will be determined by the industrial arrangements that apply to this worker such as a collective agreement, award, and award conditions with over award salary rates or a common law contract.

Where there is no Australian performing equivalent work in the same workplace, the employer may demonstrate the market rate by referring to an applicable modern award or collective agreement. If there is no applicable agreement or award, the employer will be required to provide a range of evidence to substantiate the market salary rate (such as remuneration surveys or evidence of what employees are paid in similar workplaces).

Temporary Skilled Migration Income Threshold

The Temporary Skilled Migration Income Threshold will also apply from the 14 September 2009 and is currently set at $45,220 per annum.

If the market salary rate for the nominated occupation falls below this threshold, a visa will not be granted by the department. DIAC has confirmed that employers will not be able to just inflate an overseas worker's proposed salary in order to meet the threshold to have the visa approved.

For example, if the market salary rate for an occupation is $39,500, which is the amount paid to equivalent Australians in the employer's workplace, the application would be refused as the salary is below the threshold of $45,220. Even if the employer decided to offer the overseas worker a salary of $45,220, then the application would still be refused, as it is the market salary rate that the department compares to the threshold, not the actual salary proposed.

Transitional arrangements for existing visa holders

Employers currently paying the existing Minimum Salary Level (MSL) to Subclass 457 visa holders already in Australia have until the 1 January 2010 to move to paying market salary rates. For those whose market salary rates are lower than the present MSL, the transitional arrangements have a safety net requiring employers to continue to pay at least the MSL for the duration of the existing visa.

However, the new requirements will apply if an existing Subclass 457 visa holder applies for a new Subclass 457 visa, changes their employer sponsor or is the subject of a new nomination varying their occupation.

Further information

Further information is available on the DIAC website, www.immi.gov.au/skilled/457-market-salary-rates.htm. The department will also be holding information sessions over the coming months throughout Queensland. If you have any questions, contact Glenda Hutch, DIAC/CCIQ Industry Outpost Officer, on 0434 077 581.

Have your say

CCIQ is seeking feedback from members on any impacts that these changes may have on your businesses. Email us at policy@cciq.com.au.

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