High-income threshold to rise

17 Jun 14

AUSTRALIA

IMPACT – MEDIUM

What is the change? The Fair Work High Income Threshold is increasing from AUD129,300 per year to AUD133,000.

What does the change mean? The new salary threshold will affect workers over age 50 on Temporary Work (Skilled) visas (subclass 457) seeking Australian residency.

  • Implementation timeframe: 1 July 2014.
  • Visas/permits affected: Temporary Work (Skilled) visas (subclass 457), Employer Nomination Scheme (subclass 186), Regional Sponsored Migration Scheme (subclass 187).
  • Who is affected: Workers over age 50 on subclass 457 visas who are seeking residency.
  • Impact on processing times:
  • Business impact: Salary adjustments may be necessary for employees over 50 wanting to apply for permanent residency under the Employer Nomination Scheme.

Background: The Fair Work Act 2009 established the High Income Threshold for employees claiming unfair dismissal. The threshold prevents workers who earn more than the threshold and who are not covered by a modern award or enterprise agreement from making an unfair-dismissal claim. Every 1 July, the government adjusts the threshold.

BAL Analysis: The annual adjustment is important for individuals over 50 applying for Australian residency under the Employer Nomination Scheme. Individuals over 50 must have been working for their nominating employer as the holder of a subclass 457 visa for at least four years immediately before applying, and their employer must have paid a salary at least as much as the Fair Work High Income Threshold in each of the four years.

The increased threshold means that employers may need to adjust some salaries so that workers will maintain their eligibility under these rules.

This alert has been provided by BAL Australia. For additional information, please contact australia@balglobal.com.

MARN: 9683856

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