Expert Advice

Employing foreign workers – Subclass 457 visas and changes from July 2013

B2B Editor1 May 2013

The Temporary Work (Skilled) (subclass 457) Visa (“subclass 457 visa”) is in practice the most common work visa used in Australia. Its popularity has continued despite the substantial changes to the 457program in 2009, when it became more expensive and more onerous for an employer to recruit overseas workers. These changes were implemented to prevent abuse of the scheme.

The number of primary visa holders of subclass 457 visas in Australia on 28 February 2013 was 107,510.

The reason for the popularity of the subclass 457 visa may be the flexibility – the length of sponsorship can be between 1 day and up to 4years. Businesses can tailor the length of the sponsorship according to the length of the employment contract that they want to put in place.The most common way to sponsor a skilled worker using the subclass457 visa program is for an employer to become a “standard business sponsor” (“SBS”), which is usually valid for three years and can be extended. While an employer is an SBS, they are permitted to sponsor an unlimited number of subclass 457 visa holders. Applications to be anSBS can be lodged online, and are processed relatively quickly.

On 23 February 2013 the Minister for Immigration and Citizenship,Brendan O’Connor, announced a number of reforms to the subclass 457program. These changes are expected to take effect from 1 July 2013.

The reforms include a new requirement for employers to demonstrate a genuine need for skilled workers from overseas.Employers will have to show genuine attempts have been made to open job opportunities up to Australians before being able to access foreign workers. In addition, the English Language requirements for certain positions will be raised.

These reforms are said to be the Government’s response to a trend:that the program is being increasingly used by temporary visa holders, such as those already in Australia on a “working holiday maker visa” ora “student visa”, who are seeking to remain in Australia. This is contrary to the purpose of the subclass 457 program which is designed to supplement the skilled Australian labour force from overseas by filling gaps in the skilled Australian labour force.

The 1 July 2013 changes will further complicate the requirements for Subclass 457 sponsorship and visa applications which are already very complex. If your business currently employs, or is intending to employ, foreign workers, you should seek specific professional advice early to ensure your compliance as an employer/sponsor.