Review of Sponsorship Obligations for 457 Sponsors

by Mark Webster 02/03/2009

As a result of the Deegan Report released last year, the Skilled Migration Consultative Panel is reviewing new sponsorship obligation regulations for 457 sponsors.

The new regulations will most likely deal with:

  • New methodology for calculating the Minimum Salary Level
  • Payment of return travel costs for visa holders and spouses
  • Cooperation with inspectors acting under the Worker Protection Act
Market Rate for Minimum Salary Level

Probably the most significant change is in the Minimum Salary Level (MSL). This will now most likely be based on the market rate for each occupation in each location in Australia.

The current system is highly transparent - the Minimum Salary Level is set for each occupation and can easily be determined by employers. Employers are monitored on an annual basis, and any employer not paying the Minimum Salary Level can be sanctioned.

By moving to a system based on market rates, this introduces the following possible risks:

  • Lack of transparency: employers may have no clear idea of what market rate will be applied
  • Significant delays: particularly if DEEWR or employment tribunals become involved in determining the Minimum Salary Level
Where's the Smoking Gun?

The expressed intention of the new regulations according to the Minister for Immigration and Citizenship, Senator Chris Evans, is to make the 457 option a more expensive option for employers. However, the current Minimum Salary Levels are higher than average weekly earnings and we have seen no evidence that the salary levels for 457 visas are on average lower than the market rate.

We acknowledge that there are some employers who "do the wrong thing" and exploit their workers - underpaying them, and not advising them properly about their rights. But such employers are already breaking the law - surely the best short-term solution would be to enforce the laws as they currently stand.

With such a significant change proposed, we'd like to see hard evidence of the extent of the problem and a "gap analysis" of the existing legislative provisions before the "solution" is applied.

Claytons Consultation

The Consultative Panel making recommendations for the 457 program is made up of is made up of industry, union and state government representatives. However, we are not aware of any people on this panel who are experts in immigration law. The prospect of a panel with very little familiarity with the Migration Regulations making recommendations which could affect every employer sponsoring overseas employees is somewhat frightening.

Previous changes to the regulations were retrospective, which means the new changes could affect all current sponsors, even though the obligations were not in effect when they sponsored employees. In addition, previous changes have been introduced with scant consultation with affected parties and with very little advance notice.

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