Recommendations to overhaul 457 program released

10 Sep 14

AUSTRALIA

IMPACT – HIGH

What is the change? An independent review of Australia’s 457 program has been published, recommending major systemic changes to the skilled workers occupations list, criteria for approval of visas, and oversight of the program.

What does the change mean? Among its 22 recommendations, the report proposes to abolish labour market testing, establish an advisory council to analyse labour market needs, streamline processing for sponsors with a good track record, replace training benchmarks with a training fee, reduce income threshold for the market salary test, and step up monitoring and sanctions for non-compliance.

  • Implementation timeframe: The Government has not set an implementation date, but announced it would respond in detail to the report in the coming weeks.
  • Visas/permits affected: Subclass 457 visas.
  • Who is affected: Sponsoring employers and foreign workers in the 457 visa category.
  • Impact on processing times: The recommended changes are intended to streamline processing and simplify renewal procedures.
  • Business impact: If adopted, the recommendations will have a significant impact on sponsors and foreign workers.
  • Next steps: These recommendations envision major changes. That will require new structures and procedures, some involving legislative action. BAL will update clients as details emerge.

Background: The report was published by an independent panel that conducted a four-month review of the 457 program by speaking to 150 stakeholders and receiving 200 submissions.

The main recommendations are as follows:

  1. Establish Advisory Council Ministry. A tripartite advisory council made up of industry, trade unions and peak councils would be responsible for revising the Occupations List and would also serve as a forum where stakeholders air concerns about the list and criteria for visa approvals.
  2. Abolish current labour market testing. The report concluded that the current labour market testing regime is not reliable and should be replaced by analysis by the newly-established Advisory Council to respond to changes in labour market needs.
  3. Employers assessment. Approval of 457 visas would depend on a sponsoring company’s characteristics, including minimum financial turnover, history of sanctions and years as an approved sponsor. A three-stream model for processing 457 visa applications is recommended.
  4. Ease some visa requirements. The English language requirement would require only an average score of 5, rather than a minimum score of 5, across four competencies (reading, writing, speaking and listening).
  5. Income threshold. The Temporary Skilled Migration Income Threshold should remain at its current level for a period of two years, at which time it would be reviewed for possible increase. The income threshold for the market salary test would be reduced to $180 000.
  6. $400 training fee. The training benchmarks would be abolished and replaced by a $400 fee for each 457 visa holder payable to a government fund earmarked for training Australian workers.
  7. Enhanced monitoring and sanctions. A monitoring system for the 457 program would be modelled after the Australian Tax Office system using “risk-tiering, data matching and analysis behind the scenes.” Legal action to impose civil penalties and sanctions would be stepped up.

The full report “Robust New Foundations: A Streamlined, Transparent and Responsive System for the 457 Programme,” is available on the Department of Immigration and Border Protection’s website.

BAL Analysis: The report is the first concrete step in a systematic overhaul of the 457 program whose impact employers will begin to feel in the coming months.

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

MARN: 9683856

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