Subclass 457 – Market Rates Frequently Asked Questions – Sponsor
The following information is relevant to new and existing Subclass 457 sponsors.
From 14 September 2009, you must ensure that the terms and conditions of employment provided to the primary Subclass 457 visa holders in your employ are no less favourable than the terms and conditions you provide, or would provide to Australians to perform equivalent work in your workplace at the same location.
Note: A reference to 'Australians' in this document refers to an Australian citizen or Australian permanent resident.
When do the new market salary rates requirements come into effect?
The Migration Legislation Amendment (Worker Protection) Act 2008 (and associated regulations), including the obligation to ensure equivalent terms and conditions of employment, come into effect on 14 September 2009.
This means that from 14 September 2009, all sponsors of primary Subclass 457 visa holders will need to pay market salary rates to their Subclass 457 visa holders. There are some transitional arrangements for current sponsors and existing visa holders.
Does the new market salary rates requirement apply to existing visa holders?
There are transitional arrangements that apply in relation to existing visa holders.
Until 1 January 2010, sponsors must continue to ensure that Subclass 457 visa holders' base rate of pay is not less than the prescribed salary levels, especially where the market salary rate would otherwise be below the MSL. There are five such levels.
- $81 040 for Subclass 457 visa holders who benefit from the English language exemption
- $55 725 for Subclass 457 visa holders working in Information and Communication Technology (ICT) occupations who were granted their visa under certified regional employment arrangements
- $61 920 for all other Subclass 457 visa holders working in ICT occupations
- $40 705 for all other Subclass 457 visa holders who were granted visas under certified regional employment arrangements
- $45 220 for all other Subclass 457 visa holders.
From 1 January 2010 sponsors of existing Subclass 457 visa holders will be required to pay market salary rates.
How does the new market salary rates requirement apply in relation to visas granted after 14 September 2009?
Market salary rates requirements apply to Subclass 457 visas granted on or after 14 September 2009. This means that from 14 September 2009, you must ensure that the terms and conditions of employment provided to primary Subclass 457 visa holders in your employ are no less favourable than the terms and conditions you provide, or would provide, to Australians to perform equivalent work in your workplace at the same location.
In most cases this will simply reflect the process that you went through in determining what salary you were prepared to offer the nominated employee.
If there is an Australian performing equivalent work in the same workplace, then this means that the terms and conditions of employment provided to the primary Subclass 457 visa holder in your employ must be set with reference to the terms and conditions that apply to the equivalent Australian. This may sometimes be referred to as the 'site' or 'enterprise' rate.
If there is no Australian performing equivalent work in the same workplace, there may be an industrial arrangement (such as a collective agreement or award) that applies to Australians. In this case, the relevant industrial arrangement could be applied to the Subclass 457 visa holder.
If there is no Australian performing equivalent work in the same workplace, and no relevant industrial arrangement in operation at the workplace, it is your responsibility to identify market terms and conditions of employment supported by a range of evidence.
See also:
Subclass 457 – Market Salary Rates
Fair Work > under the section entitled 'Employers'
I want to employ a Subclass 457 visa holder and pay them over $180 000 – do I have to provide evidence of 'market salary rates'?
No. The market salary rates requirements do not apply where the Subclass 457 visa holder's annual earnings will be greater than or equal to $180 000 (which equates to the threshold for the top personal income tax rate).
What is the Temporary Skilled Migration Income Threshold – currently $45 220 per annum?
The Temporary Skilled Migration Income Threshold (TSMIT) commences on 14 September 2009. The TSMIT is intended to ensure that all Subclass 457 visa holders have sufficient income so that they can independently provide for themselves in Australia.
The TSMIT will also help ensure that Subclass 457 visa holders do not impose undue costs on the Australian community or find themselves in circumstances which may put pressure on them to breach their visa conditions. This is particularly important given these workers do not have access to a range of government support available to Australian citizens and permanent residents.
All applicants for the Subclass 457 visa must be able to support themselves when in Australia. Unlike their Australian counterparts, overseas workers on low incomes do not have access to concessions or tax transfer schemes.
Nominations will not normally be approved in relation to Subclass 457 visa applicants if the market salary rate for the position is below a Temporary Skilled Migration Income Threshold. The threshold is set at $45 220.
The TSMIT is compared with the base rate of pay (or annual earnings in certain exceptional circumstances) under the terms and conditions of employment as they apply, or would apply, to equivalent Australian citizens and permanent residents.
The TSMIT has no bearing on what the Subclass 457 visa holder should be paid in the workplace. It is not possible for a sponsor to increase a nominee's proposed salary in order to pass or meet the TSMIT requirement as it is the market salary rate for the nominated position that is compared to the TSMIT, not the claimed intended salary in the nomination.
Example: If the market salary rate for an occupation is $39 500 – that is, the market salary rate amount that is paid to an equivalent Australian in the sponsor's workplace – then the nomination would normally be refused, as the salary is below TSMIT. The nomination would still be refused even if the sponsor decided to offer the nominee a salary of $45 220, as it is the market salary rate that the department compares to TSMIT, not the actual salary proposed by the sponsor.
If I am, or intend to become a 457 sponsor, and don't have an Australian performing equivalent work in the same workplace, how will I know what the market salary rate is?
Knowing how much to pay a new employee is a situation all employers face. The determination of wages is a part of the process of taking on a new Australian employee.
The following table provides information and resources available to sponsors about pay and conditions in Australia.
| Type of Sponsor | Type of information |
|---|---|
| For national system employers | Information and advice from Fair Work Australia including in relation to:
|
| For non-national system employers | Similar information and advice from the relevant State industrial relations information and advice services. |
The following table provides the types of evidence that will need to be provided and examples of sources of information.
| Type of evidence | Examples of source of information |
|---|---|
| Local knowledge and evidence of appropriate terms and conditions of employment | Employer associations and unions. |
| Broader labour market data |
|
How do the new market salary rates requirements apply in relation to labour agreements?
If you are a party to an approved labour agreement, you must pay your overseas workers in accordance with the terms of the labour agreement. For further information regarding labour agreements please contact the Labour Agreement Section in the department's National Office.
Email: Labour.Agreement.Section@immi.gov.au
I am a Subclass 457 sponsor, and I have a current nomination application in progress with the department. How do the changes affect me?
Your application will be assessed against the new nomination criteria. The department will write to you seeking further information as required.
I am a Subclass 457 sponsor, and I have an approved nomination. How do the changes affect me?
For Subclass 457 nominations that were approved before 14 September 2009 that specified a nominated person, these nominations can be linked to a Subclass 457 visa application within the validity period of the nomination and will be processed under the new legislation.
From 14 September 2009, Subclass 457 nominations that were approved before 14 September 2009 that did not specify a nominated person will not be valid. These nominations cannot be linked to a Subclass 457 visa application.
You may seek a refund of the nomination fee for these nominations by submitting a request in writing to the department within the validity period of the nomination.