More Changes for Skilled Workers on The 457 Visa

Date: May 02, 2009
Document Type: Newsletter

The 457 temporary business (long stay) visa plays an important role in the Australian economy. This visa enables employers to fill skilled positions with an overseas worker where they have been unable to find a local candidate. The program allows overseas workers to remain in Australia for a period between three months and four years.

Because the program is driven by employer needs, there is no cap on the number of available visas. The number of visa applications should reflect economic needs. Overseas applications for the 457 Visa peaked in the second half of 2008 with an average of 700 applications lodged overseas each week. In the first quarter of 2009, this number dropped sharply to an average of 430 applications per week.

On 1 April 2009, the Commonwealth Government announced changes to the 457 Visa program.   These changes affect existing visa holders and future applicants.

The changes to the 457 Visa program were the result of widespread concerns about the program's integrity. In particular, it was revealed that some overseas workers were being exploited and that not all visa holders had the language or technical skills required by this type of visa. This also had negative effects on local wages and conditions. In order to address these concerns, the Commonwealth Government announced seven broad changes to ensure the continued long-term integrity of the program.

  • Employers must pay 457 Visa holders a minimum salary level established by law. For example, at present the minimum salary level for non information technology occupations in metropolitan areas is $43,440. Effective 1 July 2009, the minimum salary level for all new and existing visa holders will be increased by 4.1% in order to ensure that the wages of overseas workers keep pace with increases in local wages.
  • Beginning in mid September 2009, the Commonwealth Government will implement a market based minimum salary for all new and existing 457 Visa holders. It is not yet known how market rates will be established. This change is intended to ensure that overseas workers are paid a fair wage and to ensure that local wages are not undermined.
  • The minimum English language requirements for trade occupations and chefs has been increased from a score of 4.5 in the International English Language Testing System test to an average score of 5 across the four test components. This change applies to applications lodged on or after 14 April 2009 and existing visa holders will not be required to demonstrate their English skills while on their current visa. The enhanced language requirements were introduced to ensure that overseas workers have the English language skills necessary to respond to occupational health and safety risks and to participate in the Australian economy.
  • Beginning 1 July 2009, the Commonwealth Government will begin introducing formal skills assessments for applicants from certain countries where the application relates to trade occupations and chefs.
  • Employers seeking to sponsor a 457 Visa applicant will have to have a strong record of, or demonstrated commitment to, employing local labour and non-discriminatory employment practices. This was intended to address concerns that some employers may discriminate against local labour and prefer to hire overseas workers.
  • Currently the 457 Visa application process requires employers to demonstrate that they are committed to training local labour. The Commonwealth Government will be developing training benchmarks to clarify this requirement.
  • Businesses seeking to recruit 457 Visa holders for ASCO 5-7 (semi-skilled and low skilled) occupations will be required to enter into a labour agreement with the Commonwealth Government to ensure they satisfy local training and employment obligations.

The new measures will be implemented throughout 2009. The Commonwealth Government has suggested that further measures may be considered in the context of the 2009-10 budget, expected to be handed down in May 2009.

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