Australia: 457 visas – Let's have an informed debate!

Last Updated: 20 March 2013
Article by Michael van Schaik

Let's have an informed discussion around 457 visas rather than rely on the emotive press releases and media spin that seems to be dominating the space at this current time.

I will preface my comments by saying that I am not a licensed Migration Agent, rather I provide tax and consulting services to employers bringing employees to Australia.

My comments are below are based on information obtained from the Department of Immigration and Citizenship (DIAC) website - click here

Media coverage

Much of the media's coverage has been about the Minister's recent comments in respect of perceived abuses of the 457 visa regime. Some examples include:

The Minister made the following comments in his press release of 23 February 2013:

It has become clear, however, that the growth in the 457 program is out of step with those skills shortages, and the government has evidence that some employers – and I emphasise that word, some – are using 457 visas to discriminate against locals. This cannot continue.

The Minister in his press release on 10 March 2013 also made the following comments:

Latest figures show that the number of 457 visa applications jumped by 9.5 per cent this year, while the number of 457 visas granted grew by 6.6 per cent.

The figures back the Gillard Government's decision to take action to close loopholes in the 457 program to ensure that local job seekers are not disadvantaged by unscrupulous employers bringing in temporary workers from overseas.

"These January figures show that after the traditional December lull, 457s have continued to increase," Minister for Immigration and Citizenship Brendan O'Connor said.

"At January 31, there were more than 105,000 people in Australia working on temporary 457 visas. That is an increase of 22.4 per cent compared to January 2012.

"The overall trend is clear - more people are coming in on temporary skilled worker visas. This comes at a time when the unemployment rate is flat, not dropping.

"We know that in the IT industry, for example, 457 visas have increased by 68 per cent while vacancies for local IT workers are decreasing.

"The Gillard Government will not sit idly by while Australian citizens and permanent skilled migrants lose out to unscrupulous employers.

Clearly any rorting of the 457 visa program is not acceptable.

DIAC and ultimately the Minister are charged with monitoring compliance with the 457 visa sponsorship obligations. Increased monitoring may be a simple mechanism to alleviate the perceived issues around 457 visas.


The Federal Government provides determines the eligible occupations that may qualify for a 457 visa program. Effectively, it is the Federal Government determining where the skill shortages exist.

The current listing of eligible occupations is available here.

The number of primary visa holders in Australia on 31 January 2013 was 105,330. This reflected an increase of 22.4% compared with the same date in the previous program year.


It should be noted that 457 visa holders represent 0.9% of the Australian workforce based on the ABS tables below:


The graph below shows the number of 457 visas issued during the 5 year period ending 30 June 2012:


Mobility within the domestic workforce

In an attempt to increase the mobility of the Australian domestic workforce, the Department of Education, Employment and Workplace Relations (DEEWR) introduced its 'Connecting People with Jobs' program funding for job seekers who may wish to relocate within Australia to pursue employment opportunities:

  • relocating to a metropolitan area, no dependants – up to $3000
  • relocating to a metropolitan area, with dependants – up to $6000
  • relocating to a regional area, no dependants – up to $6000
  • relocating to a regional area, with dependants – up to $9000

The initiative commenced on 1 January 2011 with funding available to assist up to 4000 eligible job seekers to relocate. Connecting People with Jobs closes to new participants on 30 June 2013.


I have not been able to ascertain the number of individuals who have utilized this program at the time of writing this article.

457 visas – a quick snapshot of the facts

Some of the employer obligations – standard business sponsor

  1. The subclass 457 visa is for skilled workers from outside Australia who have been sponsored and nominated by a business to work in Australia on a temporary basis.
  2. A business can sponsor a skilled worker if they cannot find an appropriately skilled Australian citizen or permanent resident to fill a skilled position listed in the Consolidated Sponsored Occupations List.
  3. The employer has the following obligations ( amongst others):
    1. They must ensure that the terms and conditions of employment provided to a skilled worker are no less favourable than the terms and conditions the person provides, or would provide, to an Australian citizen or Australian permanent resident to perform work in an equivalent position in the person's workplace at the same location.
    2. They must ensure that the skilled worker does not work in an occupation other than the occupation that is the subject of the most recent approved nomination for the person. If they want to employ a skilled worker in a different occupation, they must lodge a new nomination in respect of that occupation for the skilled worker.
    3. They must cooperate with inspectors appointed under the Migration Act 1958.
    4. They must provide records or information that goes to determining whether:
      1. a sponsorship obligation is being, or has been, complied with
      2. other circumstances, in which the Minister may take administrative action, exist or have existed; and
      3. on request and in the manner and timeframe requested by the Minister.

Market salary

For standard business sponsors (i.e. the employer), the obligation to ensure equivalent terms and conditions of employment will mean that they must pay their workers the market salary rate.

This requirement is designed to protect skilled overseas workers from exploitation. It is also designed to ensure that skilled overseas workers are not used to 'undercut' local employment conditions and wages.

A standard business sponsor is not required to demonstrate payment of market salary rate if the proposed annual earnings of the worker is at least $180,000 (rising to $250,000 from 1 July 2013).

Temporary Skilled Migration Income Threshold (TSMIT)

The employer must demonstrate that the market salary rate for the position they are seeking to fill is greater than the TSMIT.

If the market salary rate for the position the employer is seeking to fill does not exceed TSMIT, the employer is not able to bring temporary skilled workers to Australia under a 457 visa.

TSMIT is currently set at $51,400 and is indexed annually.

Monitoring and Compliance

The DIAC website indicates approved sponsors are routinely monitored. It also responds to information, such as allegations or media reports. This can take place during the approved sponsorship period and for up to five years after the sponsorship approval ceases.

DIAC monitors sponsors in three main ways:

  1. by exchanging information with other Australian, state and territory government agencies
  2. through written requests to the sponsor to provide information in accordance with the sponsorship obligations
  3. by visiting businesses with or without notice.

If the employer fails to meet their obligations, DIAC may impose the following sanctions:

  • the employer could be barred from sponsoring more people until a specified date
  • the employer could be barred for a specified period from applying to be a sponsor until a specified date
  • one or more of the employer's existing approvals as a sponsor could be cancelled
  • the employer could be ordered by a court to pay a fine for each failure of up to AUD33 000 if you are a body corporate and AUD6600 if you are an individual
  • the employer could be issued an infringement notice for each failure of up to AUD6600 if you are a body corporate and AUD1320 if you are an individual.

Compliance monitoring activity by DIAC

The Minister advised that as at 31 January 2013, there were more than 105,000 people in Australia working on temporary 457 visas.

The following information was provided by DIAC:

21: Subclass 457 monitoring performance

It would appear that the percentage of employer sanctions as compared to the number of active sponsors equates to approximately 0.6% of the current employer population.

Only one employer over the previous three years has appeared before the Federal Magistrates Court.

So I go back to my opening remark - let's have an informed discussion around 457 visas rather rely on the emotive press releases and media spin that seems to be dominating the space at this current time.

This publication is issued by Moore Stephens Australia Pty Limited ACN 062 181 846 (Moore Stephens Australia) exclusively for the general information of clients and staff of Moore Stephens Australia and the clients and staff of all affiliated independent accounting firms (and their related service entities) licensed to operate under the name Moore Stephens within Australia (Australian Member). The material contained in this publication is in the nature of general comment and information only and is not advice. The material should not be relied upon. Moore Stephens Australia, any Australian Member, any related entity of those persons, or any of their officers employees or representatives, will not be liable for any loss or damage arising out of or in connection with the material contained in this publication. Copyright © 2011 Moore Stephens Australia Pty Limited. All rights reserved.

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