24th June 2007

DIAC fee increase
457 – new Bill to strengthen Sponsor's Undertakings
457 – new English Requirement 1.7.07
Student Visa news

Many important changes are to take place which will affect the General Skilled visas, the 457 visas and the Student visas.The new rules underpinning the GSM program will take effect on 1 September 2007.Policy makers and officers from the DIAC have recently completed a round of 'roadshows' to show case the new GSM program to migration agents around Australia, and more updated information has been made available to migration professionals.We have already provided an overview to this reform in our April Alert.Our website will be updated to include the latest information to enable our readers to understand these changes.An enquiry into the 457 visa program has recently been undertaken by the Senate Joint Standing Committee on Migration.Much tougher rules regarding both the criteria for this visa and the related business sponsor's undertakings are to be implemented as law in the near future.These include the introduction of an English language requirement for 457 visa applicants.No doubt the new 457 business sponsor's obligationsare intended to be introduced to coincide with the new Employer Sanctions Act (see our March Alert).The Employer Sanctions Act will make employing illegal workers a criminal offence and applies to all employers (as distinct from 457 visa which only applies to 457 business sponsors).Unfortunately, .few concrete details have been released by the DIAC in relation to most of the changes.We will endeavour to keep our readers updated as news comes to hand.

Fee Increase – effective 1 July 2007

Fee increase by 3.5% to most lodgement fees are to be effective on1 July 2007.However, the Second Visa Application Charge (VAC) for the Contributory Parent visa applications will be increased by 7.6%

Applicants must make sure their applications reach DIAC's office prior to 1 July 2007 to avoid the new fees.In addition, if an application is received on or after 1 July 2007, it will not be treated as a valid application until the new fee is paid.

457 Visa News

Proposed Changes to the Business Sponsor's Undertakings for 457 Employers

The Minister for DIAC has introduced into Parliament the Migration Amendment (Sponsorship Obligations) Bill 2007 to implement tougher undertakings for 457 employers, which will become law once passed by both houses of the Parliament.

Below are some Q & A for the Migration Amendment (Sponsorship Obligations) Bill 2007 from DIAC

(quoted verbatim from DIAC announcement to Migration Agents, 27 June 2007)

Why are the enhanced sponsor sanctions being introduced?

The enhanced sponsor sanctions are being introduced to encourage greater levels of compliance by sponsors of their obligations under the 457 visa programme. The improved obligations and greater penalties demonstrate the Government's determination to crack down on the small number of employers who abuse the programme.

Who will be affected by the obligations and sanctions?

All existing and future 457 sponsors will be required to meet the new obligations. Those employers who are abusing the programme may incur the expanded range of sanctions DIAC will have available.The large majority of employers who are doing the right thing will not be impacted upon by the enhanced sanctions regime.There are currently over 12 000 sponsors using the programme, most of whom are doing the right thing.

Will employers have to meet their current undertakings and the new obligations?

Once the Bill is passed and receives Royal Assent, employers will have to comply with the new obligations which will replace the undertakings.

When will the obligations come into effect?

Once the Bill has passed through both houses of Parliament and receives Royal Assent.

Will the new obligations apply to all existing sponsors?

Yes, the obligations will apply to all existing and new sponsors and the penalties will apply from their date of effect.

What penalties will apply to sponsors who breach obligations?

Employers who breach the more serious obligations may face civil penalties.The existing administrative sanctions such as barring and cancellation will continue to apply.

Will DIAC take legal action against employers?

Yes, in some circumstances, the Department will be litigating against employers who have breached their obligations.This will apply particularly to the more serious obligations.

If an employer is having legal action taken against them, does it mean that they won't have to repay monies owed?

No, in addition to imposing a civil penalty on the employer, the court has the power to order the employer to pay a person monies owed under an obligation.For example, the court may order that salary underpayment be made good.

How much are the penalties?

Breaches of obligations incur a maximum penalty of $6600 for an individual and $33 000 for a body corporate for each identified breach.

Can money owed to a 457 visa holder from the employer be recovered by the visa holder?

Persons owed money under an obligation may also pursue restitution.If, for example, a worker has been paid less than the minimum salary level, he or she may pursue the underpayment in a court or small claims tribunal.

Why are the obligations being included in the Migration Act?

Some of the new obligations reflect existing undertakings a business sponsor must make under the Migration Regulations 1994. These have been elevated to the Act as a reflection of their importance.

What are the new obligations?

The obligations include:

• Pay at least the minimum salary level
  
  
• Employ a primary person in the same or a higher-skilled activity (not employing them in an unskilled or lesser skilled position)
  
  
• Pay travel costs for the sponsored worker and their family from Australia
  
  
• Pay certain medical costs (public health costs for the sponsored person and their family)
  
  
• Pay other fees and costs (including licence, registration, membership or other fees required to work) and all costs associated with recruitment and migration agent fees
  
  
• Keep records relating to obligations, the sponsorship of the employee and records relating to legislation
  
  
• Provide information to the Department

What are the powers of inspectors?

Specially trained DIAC officers, called inspectors, will have the power to enter certain premises unannounced and without force. This can occur at any place of business or any other place which they have reasonable cause to believe there is information, documents or any other thing relevant to monitoring the approved sponsors compliance with the obligations.

How will the new legislation affect the Office of Workplace Services?

The Office of Workplaces Services (OWS) already investigates issues relating to underpayment of salary to employees under the Workplace Relations Act.This new legislation also allows OWS to investigate Minimum Salary Level (MSL) breaches on behalf of DIAC.

How are DIAC inspectors different from OWS inspectors?

The primary difference between DIAC and OWS inspectors is the Act which they are appointed under.DIAC inspectors operate within the jurisdiction of the Migration Act 1958 whilst OWS inspectors are governed by the Workplace Relations Act 1996.The new legislation will allow OWS inspectors to be delegated by DIAC to investigate MSL breaches.

What kind of records do employers need to keep?

Employers will be required to keep records of all payments made to visa holders, all payments made under the obligations, records relating to the sponsorship of the person and other records which may be prescribed in the regulations.

Do I have to supply the Department with these records?

Yes. It will be an offence to fail to produce a document requested by an inspector. This offence attracts a maximum penalty of imprisonment for 6 months.

What information can DIAC share with other agencies?

The changes allow DIAC to provide relevant information to other agencies to assist them to monitor compliance by the sponsor with their laws. For example, we could provide details to the ATO to ensure the sponsor is complying with relevant taxation and superannuation laws.

When will the infringement notices take effect?

The bill provides a power to make regulations to set up an infringement notice regime, under which sponsors would be issued with infringements notices as an alternative to civil proceedings. The amount of the infringement notices cannot exceed 1/5th of the maximum amount of the civil penalty ($1320 for an individual and $6600 for a corporation).

Tip: All 457 sponsors are advised to implement risk management procedures to ensure strict compliance with the new law.

DIAC on the new English Requirement for 457 applicant

The Minister for DIAC has announced that an English language requirement would commence from 1 July 2007.

(quoted verbatim from DIAC announcement to Migration Agents, June 2007)

What is the new English language requirement?

The new English language requirement has two parts:

From 1 July 2007, Employers who seek to sponsor must ensure that overseas workers they employ have functional English language skills equivalent to an overall band score of 4.5 in an International English Language Testing System (IELTS) test OR where a higher level is required for licensing/registration, that level of English language skills.

From 1 July 2007, Subclass 457 primary visa applicants will be required to provide evidence of their English language skills. The department may seek formal demonstration of the applicant’s English language skills through an International English Language Testing System (IELTS) test, based on information provided in the application and other risk factors. The methodology to establish when formal IELTS testing will and will not be required is yet to be determined.

Who does the new English language requirement apply to?

The English language requirement applies to:

all sponsorship applications lodged but not decided before 1 July 2007, and all sponsorship applications lodged on or after 1 July 2007.

All Subclass 457 primary visa applications lodged but not decided before 1 July 2007 and all Subclass 457 primary visa applications lodged on or after 1 July 2007.

I am a Subclass 457 visa holder, do the changes effect me?

The changes do not impact existing visa holders while they remain on their present Subclass 457 visa. Should a Subclass 457 visa holder seek to apply for a further Subclass 457 visa, they would be required to meet the new English language requirement along with all other relevant regulatory criteria.

Tip: The current waiting list for an IELTS test is up to 6 months. This is a serious imposition on employers who have urgent needs to recruit overseas workers.All employers should lobby the Minister directly to clarify this new requirement as soon as possible to reduce uncertainty.

Student Visa – important changes – from 1 July 2007

Change of Education Provider (condition 8206) – Students who wish to change education provider during the first 12 months of a course will be required to obtain a letter of release from the original education provider.The DIAC has essentially passed the responsibility of whether to grant a release on to the original education provider.No exact details have yet been released and we will keep our readers updated on progress.

Course Attendance Requirement (Condition 8202) -Currently a Section 20 automatic cancellation notice will be issued under the Education Services for Overseas Students Act (ESOS) if a student's attendance falls below 80%.From 1/07/2007, if a student's attendance drops below 80% but remains at 60% or above, S20 notice will not be automatically issued.The student will be required to provide a satisfactory explanation to the education provider for the low attendance.Should the education provider accept the explanation, no further action will be taken.If the explanation is not deemed to be satisfactory, the student will then be referred to DIAC and a S20 notice will be issued.In cases when attendance are between 60% - 79%, cancellation will not occur if exceptional circumstances can be established by the student.If the attendance falls below 60%, cancellation will be mandatory and no explanations will be accepted.Again, details to this new legislations are yet to be released.

Tip: As these are significant new changes to the Student Visa conditions, all student visa holders are advised to become familiar with these new provisions.