Australia: Section 457 Visas In Focus

Last Updated: 29 September 2008
Article by Brian Jackson

A recent discussion paper released by the Minister for Immigration and Citizenship, Chris Evans, provides a glimpse into a new Bill due before the end of the year amending the current Migration Act 1958 (Cth) (Act). The proposed changes aim to address concerns raised about the exploitation of migrant workers, salary levels and English language requirements within the temporary skilled migration program.

Some of the changes outlined in the Minister's discussion paper include the increase in penalties for employers found to be giving 'misleading information' with regard to their obligations under the 457 visa scheme. This includes up to 10 years in jail and/or fines up to $110,000. Other measures include specially appointed officers with powers to enter and search workplaces to determine whether employers are complying with their obligations.

The emphasis on strict compliance places an onus on employers sponsoring 457 visa employees to meet the challenging administrative and financial obligations. We look at these proposed changes and what they mean for employers.

Inspectors powers

Officers of the Department of Immigration and Citizenship (DIAC) will be given new investigatory powers. This will require sponsors to cooperate with requests made, and provide relevant information when necessary. Information that may be required varies from financial undertakings, payment records, contact details of the primary visa holder and evidence of training activity. This will ensure that sponsors must provide certain information to DIAC Officers within a certain time period.

The powers of DIAC Officers will be similar to those currently wielded by the Workplace Ombudsman under the Workplace Relations Act 1996 (Cth). The proposed investigatory powers will allow DIAC Officers to enter a place of business, or other place in which the inspector has reasonable cause to believe there is information, documents or any other thing relevant to determining whether the program requirements are being complied with. Officers will be able to:

  • Inspect any things.
  • Interview any persons.
  • Require production of documents (in writing or otherwise).
  • Inspect and copy documents.
  • Require a person to reveal who has custody of a document.

Penalties for non-compliance

The new powers also give DIAC Officers the ability to issue an appropriate penalty in cases of noncompliance. DIAC will also establish a 'name and shame' register of those sponsors who have been found guilty of non-compliance.

Administrative and punitive sanctions remain in force. The maximum penalty for immigration fraud is $110,000 or 10 years imprisonment or both.

Employer obligations

There are new record-keeping obligations on sponsors. This will ensure that sponsors need to keep records of all Subclass 457 Visa operations. The notice to produce information will depend on the importance of the situation.

The sponsor will also be responsible for notifying DIAC of any changes in circumstance such as business address, business registration, appointment and cessation of a visa holder's employment or activities with the sponsor. Consideration is currently being given to other types of changes that may need to be notified and the timeframe of notice.

Sponsors will have to provide certain information to visa holders. This includes the type of workplace rights visa holders are entitled to in Australia. Under the new framework further salary related obligations will be placed on sponsors:

  • To not use overseas workers as a means of strike-breaking.
  • To pay income protection insurance. This would make sponsors liable for premiums for insurance policies which offer income protection insurance to a prescribed level to primary visa holders.
  • To pay the primary visa holder at least a particular amount of their salary. The fixing of the minimum salary level may move away from the current basis of Average Weekly Ordinary Time Earnings of Australian citizens and permanent residents.

Non-salary related costs for the sponsor will include:

  • To pay travel costs into Australia of the primary visa holder and their family.
  • To pay travel costs from Australia. This places an obligation on the sponsor to pay the primary visa holder and their family's costs when leaving Australia.
  • To pay the costs associated with their recruitment. This will ensure that the visa holder is not back charged for any recruitment costs.
  • To pay the costs associated with migration agent services. Again, these costs would be limited to costs the employer incurred themselves or costs the employer was aware or ought to have been aware of being incurred by another party including the visa holder
  • To pay costs associated with licensing and registration, or similar. Make sponsors liable to pay the costs (up to a prescribed limit) associated with licensing, registration or professional membership of the primary visa holder, where the primary visa holder is required to be so licensed or registered to perform their role with the employer.
  • To pay certain medical costs or pay for health insurance. Sponsors will be liable to pay for any medical costs incurred in public hospitals by visa holders, where those costs were not covered under the reciprocal healthcare arrangements.
  • To pay education costs for minors. This would make sponsors liable for the education costs of the primary visa holder's children who are required to attend school under Australian law, in state or territory jurisdictions that do not elect to bear these costs themselves.


Employers seeking to sponsor 457 visa employees will need to watch this space. Many employers will be concerned that changes to the 457 visa may not assist in addressing the labour shortage, particularly in the resource states. The Migration Amendment Bill 2008 is expected to be presented before Parliament later this year. The hope is that any changes will be directed to streamlining the process so that it is a simpler exercise to meet labour shortages.

Phillips Fox has changed its name to DLA Phillips Fox because the firm entered into an exclusive alliance with DLA Piper, one of the largest legal services organisations in the world. We will retain our offices in every major commercial centre in Australia and New Zealand, with no operational change to your relationship with the firm. DLA Phillips Fox can now take your business one step further − by connecting you to a global network of legal experience, talent and knowledge.

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.

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