Australia: Proposed Reforms Of The Business (Long Stay ) Subclass 457 And Related Temporary Visa Program

Last Updated: 12 September 2008
Article by Catherine Dunlop


In anticipation of the introduction into Parliament of a new Bill and associated Regulations to amend the Migration Act 1958, the Minister for Immigration and Citizenship, Chris Evans, is currently undertaking a wide ranging consultative process with regard to broad reforms of the 457 visa program.

The proposed reforms focus on:

  • redefining sponsorship obligations for 457 employers and establishing a sponsorship obligations framework for a range of other subclasses;
  • expanding powers to monitor and investigate possible non-compliance with those obligations;
  • enhancing measures to address identified breaches of obligations; and
  • improving information sharing between government agencies at all levels.

The aim of the proposed reforms to the 457 visa program is to:

  • ensure that the program remains responsive to labour market needs in light of skills shortage;
  • protect employment and opportunities for Australian employees; and
  • prevent exploitation of temporary skilled foreign workers.

Features of proposed reforms

Main features of the proposed reforms include:

  • repeal of existing sponsorship and nomination provisions;
  • introduction of a uniform sponsorship framework for particular '400 series' visas including 457 visas;
  • requirement that the new uniform sponsorship framework apply to 457 sponsors retrospectively; and
  • a requirement that the new uniform sponsorship framework apply to the other 400 series visas from the date that the legislation comes into effect.


According to the DIAC "Business (Long Stay) Subclass 457 & Related Temporary Visa Reforms" discussion paper outlining the proposed reforms, the advantages of the new uniform sponsorship framework would include:

  • with the approval of one sponsorship, a sponsor will have access to visa applicants across a range of visa subclasses;
  • sponsors will be unable to utilise less formal visa arrangements to avoid sponsorship obligations; and
  • a uniform sponsorship framework will aim to ensure that vulnerable visa applicants who previously did not need to be sponsored or were inadequately supported have access to uniform rights under the program.


Under the proposed reforms, however, applicants who previously did not require a sponsor will, under the new program, be subject to sponsorship.

Proposed Sponsorship Obligations

Whilst the aim is to create a uniform sponsorship framework, some obligations will be common to all visa subclasses under the program, whilst other obligations will be specific to particular subclasses.

Part 1 - General Obligations

It is proposed that the following general obligations will apply to all temporary visa subclasses that are included in the new uniform sponsorship framework.

Employer must...

Obligation requirements...

keep records

Sponsor must keep records of their compliance with the other obligations.

Provide information

Sponsors would be required to provide relevant information upon request within a prescribed timeframe.

notify DIAC of prescribed changes in circumstances

Sponsors are required to notify DIAC of certain changes in circumstances within a prescribed period.

Consideration is currently being given to a more prescriptive list of the types of changes that are to be notified, and the appropriate time frames for such notifications.

notify visa holder of certain information

Sponsors would be required to provide the primary visa holder with information as to their rights associated with working in Australia.

Cooperate with inspectors

Sponsors would be obliged to cooperate with specially appointed inspectors in the exercise of their investigative powers.

pay costs of and in regards to protection visa applications by visa holders

Sponsors would be liable for the payment of costs associated with the location, detention, removal or processing of protection visa applications by visa holders, up to a prescribed limit.

Part 2 - Subclass 457 salary specific obligations

Employer must...

Obligation requirements...

not use overseas workers as a means of strikebreaking

Sponsors cannot utilise temporary overseas labour during periods of lawful industrial action or to influence enterprise bargaining negotiations.

pay income protection insurance

Sponsors would be liable for premiums on insurance policies which offer income protection insurance to a prescribed level to the primary visa holder.

This would provide a temporary safety net for 457 visa holders for a prescribed period should they become redundant or unemployed due to circumstances beyond their control.

pay the primary visa holder at least a particular amount

Sponsors must pay the primary visa holder at least the minimum salary level applicable at the relevant time.

The minimum salary level is currently calculated according to a market based price signal, and is based on Average Weekly Ordinary Time Earnings of Australian citizens and permanent residents.

Part 3 - Subclass 457 non-salary specific Obligations

Employer must...

Obligation requirements...

pay travel costs to and from Australia

Sponsors would be liable for travel costs for the primary visa holder and any members of his or her family to and from Australia.

Sponsors would be unable to later recover these costs from the visa holder's salary.

pay costs associated with recruitment & migration agent services

Sponsors would be liable for recruitment costs associated with the primary visa holder and costs of migration agent services provided to the visa holder.

The scope of such an obligation would be limited and it would seem that the policy intention is that sponsors would be unable to later recover these costs from the visa holder's salary.

pay costs associated with licensing, registration or similar

Sponsors would be liable for costs (up to a prescribed limit) associated with licensing, registration or professional membership, where the primary visa holder is required to be licensed or registered to perform his / her role with the employer.

Sponsors would not be prevented from making a commensurate reduction in visa holders' salary to account for such costs provided that salary did not fall below any applicable minimum standards.

pay certain medical costs OR pay for health insurance

Sponsors would be liable for medical costs incurred in public hospitals by visa holders where those costs were not covered under reciprocal healthcare arrangements.

Alternatively, sponsors would be directly liable for insurance premiums for policies which cover medical costs incurred by visa holders in public hospitals.

pay education costs for certain minors

Sponsors would be liable for education costs of visa holders who are required to attend school under Australian law (aged between 4 or 5 and 15 or 16) in State and Territory jurisdictions

that do not elect to bear these costs themselves.

Monitoring and Compliance

Currently the 457 monitoring regime requires sponsors to cooperate with DIAC monitoring activities. However the present framework does not provide much guidance as to the expectations on business sponsors with regard to:

  • the monitoring and investigation process; or
  • the provision of information in response to monitoring in a prescribed form, or in a timely way when taking into account individual sponsor's circumstances.

DIAC is proposing that under the new uniform sponsorship framework that:

self-reporting would be the principal monitoring mechanism with site visits employed only in the case of sponsors of particular concern.

Proposed forms of monitoring

  • Desktop-audit monitoring.

Similar to the current monitoring regime, sponsors would be required to provide specified information in a particular form and within a prescribed period of time.

  • In person monitoring.

Specially appointed monitoring officers, similar to workplace inspectors under the Workplace Relations Act 1996, would be given legislated investigative powers whereby they could:

  • enter a place of business, or other place;
  • without force;
  • announced or unannounced; where they have reasonable cause to believe that a sponsor may not be complying with its sponsorship obligations.

The monitoring officers would be given power to:

  • inspect any things;
  • interview any persons;
  • require production of documents (in writing or otherwise);
  • inspect and copy documents; and
  • require a person to reveal who has custody of a document.

Failure to comply with DIAC monitoring processes would attract a penalty / sanction.

Failure to comply with sponsorship obligations

Failure to comply with sponsorship obligations, under the current 457 program, attracts notification of the alleged breach and if appropriate, administrative sanctions that range from:

  • a formal warning notice;
  • suspension, cancellation or barring of sponsorship by the sponsor for a specified period of time.

Proposed sanctions for non-compliance

Under the proposed uniform sponsorship framework, non-compliance with the sponsorship obligations across all applicable 400 series visas, including 457 visas, would be dealt with via:

  • Administrative sanctions (whereby a sponsor may have their sponsorship approval cancelled or suspended); or
  • Punitive sanctions which would include civil, and possibly criminal, penalties ultimately determined by a judge or magistrate.

Provision of false or misleading information

Currently it is an offence under the Migration legislation for a sponsor to provide false or misleading information in connection with an application for sponsorship or nomination of a position. T he existing maximum penalty for such an offence includes imprisonment for 10 years or 1,000 penalty units (currently $110,000) or both.

The proposed reforms will seek to expand the existing provisions to cover situations where a sponsor provides false or misleading information once a visa holder is in Australia and/or in connection with monitoring activities.

Publishing non-compliance

It is DIAC's intention that the proposed legislation make provision for the publishing of the names of those sponsors who are considered to be repeat offenders and/or do not take appropriate action to remedy their non-compliance with their sponsorship obligations.

Improved Information sharing

The proposed legislation will also contain provisions whereby the exchange of information between several parties including, the visa holder, the sponsor, DIAC, other government agencies and the public will become more accessible and such a process more formalised.

DIAC proposes to facilitate full exchange of information between the visa holder, the sponsor and DIAC for limited purposes such as a sponsor providing contact details for a visa holder. Other provisions will aim at formalising two-way exchange of information between DIAC and other government agencies such as the Australian Taxation Office to ensure that sponsors are meeting their sponsorship obligations. DIAC also proposes to publish a greater level of data to the public in regard to the visa programs in general.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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