26
July 2016
PDF version [296KB]
Harriet Spinks
Social Policy Section
One of the most significant changes to
Australia’s immigration flows over the last two decades has been the growth of
long-term (12 months or more) temporary
migration. While some of this growth can be attributed to increases in
arrivals of overseas
students and working
holiday makers, a large proportion of it is also due to increases in the
number of temporary skilled migrants. The Temporary Work (Skilled)
(subclass 457) visa is the most common pathway that employers use to
sponsor skilled workers on a temporary basis. Migrants who have entered under
this category visa are increasingly transitioning to permanent residency
(commonly referred to as two-step migration).
The Temporary
Work (Skilled) (subclass 457) visa, introduced
by the Howard Government in 1996, is an uncapped, demand-driven program
designed to enable approved employers to address short-term skill
shortages. As a result, applications and grants often fluctuate according
to the state of the economy and the labour market.
This guide updates an earlier Parliamentary Library
publication—The
subclass 457 visa: a quick guide, published in 2013. It includes a brief overview of the 457 visa program and
provides the following statistics on visa grants:
Table 1: Temporary Work
(Skilled) (subclass 457) visa grants, 1996–97 to 2014–15
Table 2: Primary and
secondary (subclass 457) visa grants, 2005–06 to 2014–15
Overview of the 457 visa program
Visa holders
The subclass
457 visa is an employer-sponsored visa, meaning that visa applicants must
be nominated by a business which has been approved as a sponsor by the
Department of Immigration and Border Protection (DIBP). Subclass 457 workers,
known as ‘primary applicants’ must also apply for each of the family members (known as
secondary applicants) they wish to bring to Australia for the duration of their
employment.
To be eligible for a subclass 457 visa via standard
business sponsorship, a worker must have an occupation on the Consolidated
Sponsored Occupations List (CSOL). Eligible occupations listed on the CSOL
are classified according to the Australian
and New Zealand Standard Classification of Occupations (ANZSCO), and
occupations must be classified at an ANSZCO skill level of 1–3 (out of 5 skill
levels).The primary applicant must have a genuine intention to perform in the
nominated occupation, have the necessary skills and experience, meet English
language requirements (unless exempt) and have
relevant licencing and registration to perform work duties. All applicants must
meet health and character requirements.
A 457 visa worker (known as the primary visa holder) may
be accompanied by a partner, children and other dependent relatives who are
issued with secondary subclass 457 visas. Family members (known as secondary
visa holders) are authorised to work or study in Australia for the duration of
their stay. There are no restrictions on the hours they may work or the kind of
work they may do.
A subclass 457 visa entitles the holder to
live and work in Australia for up to four years. Subclass 457 visa holders and
their families are free to move between employers, states and regional or
non-regional locations. However, this is on the proviso that any new employer
is approved to sponsor and nominate under the program. Subclass 457 visa
holders now have 90 consecutive days once employment has ended with one
employer to seek sponsorship with a new employer, or their visas may be
cancelled.
Workers under the subclass 457 scheme are governed by the same minimum
conditions of employment as Australian workers. These conditions include
working hours, overtime payments, rest breaks, sick leave and holidays. All
temporary workers have the right to join and be represented by a trade union
and the right to be treated fairly, which includes not being dismissed unfairly
or discriminated against for reasons of race, religion, sex, pregnancy, sexual
orientation, disability or for trade union membership.
As at 31
March 2016 there were 177,390 subclass 457 visa holders in Australia. Of
these, 97,766 were primary visa holders and 79,624 were secondary visa holders
(that is, dependents of the primary visa holder). Of the primary
visa holders in Australia on 31 March 2016 the largest numbers were
employed in New South Wales (40,430) followed by Victoria (23,310) and Western
Australia (14,790). The top industries of employment for primary visa holders were
accommodation and food services (15,260), other services (13,890) and
information, media and telecommunications (10,030). The main countries of
citizenship for primary visa holders in Australia were India (19,360), the
United Kingdom (18,270), China (6,950) and Ireland (6,780).
Employers
Employers wishing to sponsor workers to come to Australia
on subclass 457 visas may do so in one of two ways: by applying to be a
Standard Business Sponsor or by entering into a Labour Agreement with DIBP.
Standard Business Sponsorship
To qualify
as a standard business sponsor, employers in Australia must demonstrate they
are operating as a lawful business. Businesses are required to meet minimum
training benchmarks which require an ongoing commitment to training activities
for Australian citizens and permanent residents. Firms must also attest in
writing to a record or commitment to the employment of local labour and a
commitment to non-discriminatory recruitment practices. Overseas employers can
also use the program if they are operating legally and can demonstrate that
they require a skilled worker to establish (or help establish) a business
operation in Australia, or fulfil contractual obligations in Australia.
Overseas businesses are exempt from the training requirements which apply to
Australian businesses.
A labour market testing requirement was introduced
to the 457 visa program in November 2013 as a response to ongoing concerns that
overseas workers were displacing Australian workers. Under this requirement,
standard business sponsors must provide information with their 457 sponsorship
nomination about their attempts to recruit Australian workers and how they have
determined on the basis of these attempts that there is no suitably qualified
and experienced Australian citizen, Australian permanent resident or eligible
temporary visa holder available to fill the position. However, there are
exemptions to the labour market testing requirement. Labour market testing is
not required where it would conflict with Australia’s
international trade obligations, for example, under the movement of persons
provisions of a Free Trade Agreement (such as the China-Australia Free
Trade Agreement), or where the position being filled falls within an exempt occupation
as determined by the skill level of the position. Currently, all occupations
classified at ANZSCO skill levels 1 and 2 are exempt from the labour market
testing requirement.
For each sponsored worker, employers are required to show
that they are providing equal pay and conditions of employment as for
Australian workers performing equivalent work in the same location—known as the
market salary rate. This process may involve employers identifying relevant
collective agreements, awards and award conditions, common law contracts,
remuneration surveys or earnings data. Employers remunerating positions in
excess of $250,000 are exempt
from the requirement to test for market salary rate.
As at July 2016, the lowest salary acceptable under the
scheme, known as the Temporary
Skilled Migration Income Threshold (TSMIT) is $53,900. This is to
ensure that all subclass 457 visa holders have sufficient income to
independently provide for themselves in Australia. A recent independent
review of the TSMIT was established to consider factors such as the
appropriate base level of TSMIT, whether it should be indexed and whether
concessions should be available. The review was due to report to Government in
April 2016. At the time of writing, the report of the review had not been
publically released.
Labour Agreements and Project
Agreements
Labour
agreements allow for the recruitment of an agreed number of temporary
business and other skilled visa holders where employers can demonstrate a need
for specific labour that cannot be met in the Australian labour market or through
standard temporary or permanent migration arrangements. Labour Agreements are
the only way in which employers may sponsor semi-skilled workers, as workers
sponsored under Labour Agreements need not necessarily have an occupation on
the CSOL. Labour agreements are negotiated between the employer and DIBP and
are generally valid for three years.
Industry-wide labour agreements exist for certain industries
which have demonstrated a need for workers. These agreements allow businesses
in the relevant industry to sponsor workers without having to negotiate an
individual agreement. The terms of the industry agreement cannot be
renegotiated or amended by an individual employer. Currently, agreements are in
place for employers in the fast
food, restaurant
(fine dining), fishing, meat,
on-hire,
dairy,
pork
and snow
sport industries and for ministers
of religion.
Project
Agreements allow for temporary overseas workers to be recruited to
work on specific infrastructure and resource development projects which can
demonstrate a genuine labour market shortage. Designated
Area Migration Agreements (DAMAs) are agreements negotiated between
the Commonwealth (represented by DIBP) and designated areas, and are
designed to allow specific areas to respond to their specific labour market
needs. Eligible designated area representatives (that can enter into a DAMA)
may be state/territory governments, regional authorities or local councils.
DAMAs must be endorsed by the relevant state/territory government. DAMAs allow
employers in the designated area to hire skilled and semi-skilled overseas
workers. Individual employers in the area must enter into a labour agreement
which reflects the terms and conditions agreed upon in the DAMA.
Key issues
2014 Independent Review
In 2013 the Abbott Government announced
the establishment of an
independent review into the 457 visa program. The review was charged with
investigating ways of improving the integrity of the program while minimising
the ‘red-tape’ and compliance burden on businesses wishing to use the program.
The report of the review, Robust
New Foundations: a streamlined, transparent and responsive system for the 457
visa program, was published in September 2014. The report made 22
recommendations concerning the operation of the 457 visa program. The
recommendations focused on streamlining and increasing flexibility in the
sponsorship and visa application processes and on improving compliance by
sponsors.
The Government provided its response
to the report in March 2015, stating its support, or in-principle support, for
all but two of the recommendations (the two unsupported recommendations
concerned the abolition of labour market testing and an expansion of the list
of nationalities that are exempt from English language testing). Several
reforms to the program have been implemented since then, with key measures including
amendments to
English language requirements to offer greater flexibility in meeting the
requirement and making
it an offence to ask for, receive, offer, provide payment or other benefits
in return for visa sponsorship.
Exploitation concerns
Since it was introduced, one of the primary areas of concern
with the subclass 457 visa has been the vulnerability of overseas workers to
exploitation and abuse. Many cases of exploitation have been reported by the
unions and the media over the years, but the full extent of the problem is
difficult to determine. The comprehensive Visa
Subclass 457 Integrity Review (Deegan Review) conducted
in 2008 noted that the very nature of their
vulnerability (because their right to remain in Australia depends on their
continued employment with the sponsor) makes subclass 457 visa workers less likely
to report cases of exploitation, meaning much abuse and exploitation is likely
to remain hidden. The report of a recent Senate Standing Committee inquiry into
the impact of Australia’s temporary work visa programs on
the Australian labour market and on the temporary work visa holders, A National Disgrace: The Exploitation of Temporary Work Visa Holders, found that exploitation was a serious problem for temporary
migrants. The Senate inquiry made several recommendations aimed at improving
the protection of temporary migrants in the workplace.
In response to a number of concerns regarding potential
exploitation, Fair Work Australia is now empowered to monitor
compliance with sponsorship obligations to ensure workers are in their
nominated occupation and being paid market salary rates. Any suspicious
activity is referred to DIBP for investigation. Possible sanctions for failure
to comply with sponsorship obligations include being barred from future
sponsorship arrangements, cancellation of sponsor approvals, civil penalties up
to $51,000 and infringement notices for each failure attracting penalties of up
to $10,200.
Transition to permanent residency
A significant trend in migration to Australia over the
last two decades has been the growth in what is often termed ‘two-step’
migration. This is a process by which migrants come to Australia initially on a
temporary visa and then transition to permanent residency at some point—often
several years later. Many subclass 457 visa holders follow this pattern and go
on to settle permanently in Australia. In 2014–15,
50,020 permanent or provisional visas were granted to people who held a
subclass 457 visa. Of these, 48,300 were granted a permanent or provisional skilled
visa and 1,730 were granted a permanent or provisional family stream visa (such
as a partner visa).
Even before becoming permanent residents, subclass 457
visa holders are often counted towards Australia’s population gain, with net
overseas migration (NOM) calculated by the Australian Bureau of Statistics
(ABS) to include people who have stayed in Australia 12 months out of a
16-month period. Over recent years, the largest contribution to NOM has been
from people on temporary visas. In 2015 NOM accounted for around 55 per cent of
population growth.
Statistics
Table
1: Temporary Work (Skilled) (subclass 457) visa grants, 1996–97 to 2014–15
| Year |
Subclass 457
visa grants |
| 1996–97 |
25 786 |
| 1997–98 |
30 880 |
| 1998–99 |
29 320 |
| 1999–00 |
31 070 |
| 2000–01 |
36 900 |
| 2001–02 |
33 510 |
| 2002–03 |
36 800 |
| 2003–04 |
39 500 |
| 2004–05 |
48 590 |
| 2005–06 |
71 149 |
| 2006–07 |
87 313 |
| 2007–08 |
110 567 |
| 2008–09 |
101 284 |
| 2009–10 |
67 979 |
| 2010–11 |
90 119 |
| 2011–12 |
125 070 |
| 2012–13 |
126 348 |
| 2013–14 |
98 571 |
| 2014–15 |
96 084 |
Sources: J Phillips and J Simon-Davies, Migration to Australia: a quick guide to the statistics, Parliamentary Library, June 2016 and Department of
Immigration and Border Protection (DIPB), Subclass 457 annual reports and pivot tables, various years.
Table
2: Primary and secondary (subclass 457) visa grants, 2005–06 to 2014–15
| Year |
Primary |
Secondary |
Total |
| 2005–06 |
39 527 |
31 622 |
71 149 |
| 2006–07 |
46 675 |
40 638 |
87 313 |
| 2007–08 |
58 052 |
52 515 |
110 567 |
| 2008–09 |
50 661 |
50 623 |
101 284 |
| 2009–10 |
34 788 |
33 191 |
67 979 |
| 2010–11 |
48 075 |
42 044 |
90 119 |
| 2011–12 |
68 313 |
56 757 |
125 070 |
| 2012–13 |
68 481 |
57 867 |
126 348 |
| 2013–14 |
51 939 |
46 632 |
98 571 |
| 2014–15 |
51 125 |
44 959 |
96 084 |
Source: DIBP, Subclass 457 visas granted pivot table, Temporary work skilled data sets,
data.gov.au webpage, 5 May 2016.
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