Visa Newsletters

1st March 2009

Subclass 457 Visa

New DIAC Policy - effective 24/2/2009

A Brief Summary of the Update.

IMPORTANT: Must read before making a 457 application after 24/2/2009

The Department of Immigration and Citizenship (DIAC) has released a Policy Update, to take effect on 24 February 2009.Alarmingly, this Update was introduced without any advance notice to industry stakeholders and only appeared on the Agents Gateway on 27 February 2009.We are grateful to the Migration Institute of Australia (MIA) who alerted members of this Update on the same date.

A copy of the full Policy Update can be accessed at this link:

http://www.immi.gov.au/gateways/agents/news/2009/457-policy-changes.htm

I urge you to read thisdocument carefully, together with our summary/analysis below before making any new 457 applications.

This Policy Update is an instruction (or guidelines) to DIAC delegates (case officers) on how they should make their decisions. These policy guidelines provide guidance to case officers as to what they should be looking for when considering a visa application.

From the Update, it is clear that a number of the policy guidelines which support the the Migration Regulations relating to the 457 visa have been tightened, no doubt as a result of deteriorating economic conditions in Australia. Our brief analysis of these new policy guidelines are given below.

(1) Regulation 457.111(2)- Benefit to Australia

Pre 24/2/2009 -Benefit to Australia was only assessed at the Sponsorship application stage, and this requirement was assessed broadly.The Policy Update would suggest that, post 24/2/2009, a sponsor needs to demonstrate for each 457 application, that there is aBenefit to Australia (as opposed to the business) against the context of the prevailing economic conditions, both globally and locally.

The four elements of the Benefit to Australia requirements are: (only one element needs to be satisfied.)

1. the creation or maintenance of employment for Australian citizens or Australian permanent residents;
2. expansion of Australian trade in goods or services;
3. the improvement of Australian business links with international markets;
4. competitiveness within sectors of the Australian economy.
   

Recommendation – a benefit statement should be provided with the Nomination application.

Labour Market Testing???

The last paragraph under 'competitiveness within sectors of the Australian economy' in the Update is worrying.This states that“In times of growing unemployment, decision-makers would need to be satisfied that the skills and attributes required for this role could not be found locally and that the individuals proposed to be sponsored demonstrably have a higher level of skill than can be sourced within Australia'.

It is possible that DIAC may re-introduce the Labour Market Testing requirement – which had been considered as an ineffective and cumbersome exercise in the past.The MIA has advised that they are seeking clarification of this issue with DIAC, and we will keep you posted on development.

(2) Regulation 457.223(4) (e), (f), (g), (h):

(e)the applicant demonstrates, if so required by the Minister, that he or she has the skills necessary to perform the activity;

(f)for an applicant in respect of whom there is a nomination of an activity under regulation 1.20G — the Minister is satisfied that:

(i)the applicant will be paid at the level specified in the nomination; and

(ii)that level will be at least the minimum salary level that applies at the time the decision on the visa application is made; and

(g)for an applicant in respect of whom there is a nomination of an activity under regulation 1.20GA — the Minister is satisfied that:

(i)the applicant will be paid at the level specified in the nomination; and

(ii)that level will be not less than the level of remuneration provided for under relevant Australian legislation and awards; and

(iii)the level will be at least the minimum salary level that applies when the decision on the visa application is made; and

(iv)the applicant’s working conditions will be no less favourable than working conditions provided for under relevant Australian legislation and awards; and

(h)or a standard business sponsor — the Minister is satisfied that the position to be filled by the applicant has not been created only for the purposes of securing the entry of the applicant to Australia; and

(f) and (g) relate to the Nominated Salary, whilst (e) and (h) focus on the skills required for the nominated position, and the genuine nature of the application having regards to the level of the salary and the skills/attributes of the visa applicant.

The Policy Update advises the following:

• Where Total Remuneration Package is over A$100,000 for occupations in ASCO 1 and 2, no further assessment will be necessary in relation to the nominated salary.For other applications, consideration should be given as to whether the nominated level of remuneration reflects the Average Remuneration for the occupation grouping.
  
  
• A key focus should be given to the Nominated Salary and its proximity to the Average Remuneration for that occupation.
  
  
• The Minimum Salary Level (MSL) is a minimum salary and operates only as a floor salary.
  
  
• Decision maker is to obtain information from the sponsor regarding evidence of Average Remuneration.
  
  
• A number of acceptable indicators of 'Average Remuneration' have been quoted, including a relevant Collective Agreement, industrial award, salary for equivalent positions within the sponsoring business, and the ABS data etc.
  

Before 24/2/2009, DIAC policy focussed mainly onClauses (f) and (g)(i), i.e.to ensure that the nominated salary meets the MSL requirement only.The Policy Update would suggest that from 24/2/2009, a sponsor is required to provide evidence that the salary of a nominated occupation reflects (has a close proximity to) the Average Remuneration for that occupation.This is not a new requirement.DIAC is simply shifting its focus to ensure that all the requirements under (f) and (g) are met.The practical effect is that the nominated salary must meet the MSL as well as the Average Remuneration requirements.No guidelines have been given as to whether the MSL or the Average Remuneration is to form the basis for sponsorship monitoring.Using the Average Remuneration will clearly be problematic.We will keep you posted on progress.

Recommendations – for applications lodged after 24/2/2009

To ensure that a457 application meets the new policy requirements above, we recommend the following courses of action to be taken, for occupations attracting a MSL less than $100,000.

• A benefit statement is included with each Nomination application –satisfying one or more of the elements of benefit to Australia requirement.
  
  
• Provide evidence that the Nominated Salary reflects the 'Average Remuneration' for that occupation – e.g. evidence of a Collective Agreement, a relevant industrial award/instrument, or information from the ABS data.Your employment lawyer should be able to assist, and we are happy to discuss with them.
  
  
  

Additional Comments

The policy objective of the 457 program is primarily to top-up the skilled-gap and prolong growth in the Australian economy.There is NO cap to this visa category and the volume of 457 applications is largely determined by the prevailing economic conditions.DIAC has recently announced that there has been a 30% decrease in the 457 applications since the global downturn.   These new guidelines will ensure thatany attempt by employers to recruit cheap labour to Australia is going to be difficult.DIAC has issued no news in relation to workers recruited to work in regional Australia.However, we expect there will be more changes during the next few months.

Abacus Visa will endeavour to keep you updated on progress of any development regarding the 457 visa program.