Subclass 457 – Market Rates Frequently Asked Questions – Visa Holders
The following information is information relevant to new and existing Subclass 457 visa holders.
From 14 September 2009, your sponsor must ensure that the terms and conditions of employment provided to you (as a primary Subclass 457 visa holder) are no less favourable than the terms and conditions your sponsor provides, or would provide to Australians to perform equivalent work in your sponsor's 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, your sponsor will need to pay you (as a primary Subclass 457 visa holder) market salary rates. There are some transitional arrangements for current sponsors and existing visa holders.
Does the new 'market salary rates' requirement apply to existing visa holders?
From 1 January 2010 your sponsor 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, your sponsor must ensure that the terms and conditions of employment provided to primary Subclass 457 visa holders are no less favourable than the terms and conditions your sponsor provides, or would provide, to Australians to perform equivalent work in their workplace at the same location.
In most cases this will simply reflect the process that your sponsor went through in determining what salary they were prepared to offer you.
If there is an Australian performing equivalent work in the same workplace, then this means that the terms and conditions of employment provided to you 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, 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 sponsor's 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 am a Subclass 457 visa holder and I earn over $180 000. Does my sponsor have to provide evidence of 'market salary rates'?
No. The market salary rates requirements do not apply where your 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 $47 480 per annum?
The Temporary Skilled Migration Income Threshold (TSMIT) is intended to ensure that you have sufficient income so that you can independently provide for yourself in Australia. It was increased by 5 per cent on 1 July 2010 from $45 220 to $47 480 which means that the higher amount applies to all nominations lodged on or after 1 July 2010.
The TSMIT also helps to ensure that you do not impose undue costs on the Australian community or find yourself in circumstances which may put pressure on you to breach your visa conditions. This is particularly important you 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 $47 480.
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.
Subclass 457 nominations and the TSMIT
The TSMIT has no bearing on what the Subclass 457 visa holder should be paid in the workplace. A nomination under the Subclass 457 visa program will be refused in most cases if the market salary rate for the nominated position is below this level of income.
For the purposes of a Subclass 457 nomination it is not possible for a 457 sponsor to inflate a nominated worker's proposed salary in order to pass or meet the TSMIT requirement. It is the market salary rate for the nominated position that is compared to the TSMIT. The claimed intended salary in the nomination should reflect the terms and conditions of employment.
Example: If the market salary rate for an occupation is $39 500 – that is, the market salary rate amount that is paid to equivalent Australian in the employer's workplace – then the nomination would normally be refused, as the salary is below TSMIT. Even if the sponsor decided to offer the nominee a salary of $47 480, then the nomination could still be refused, as it is the market salary rate that the department compares to TSMIT, not the actual salary proposed.
If your sponsor does not have an equivalent Australian how will they 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 types of evidence that will need to be provided and examples of sources of information.
| Type of Evidence | Examples of Sources 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 your sponsor is a party to an approved labour agreement, your sponsor must pay you 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
My sponsor has a current nomination application in progress with the department. How do the changes affect my sponsor?
Your sponsor's application will be assessed against the new nomination criteria. The department may write to your sponsor seeking further information if required.
My sponsor has an approved nomination. What effect do the changes have on my sponsor and myself?
For a Subclass 457 nomination that was approved before 14 September 2009 that specified you as the nominated person, this nomination can be linked to your 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.
Your sponsor may seek a refund of the nomination fee for these nominations by submitting their request in writing to the department within the validity period of the nomination.
For nominations lodged and approved before 1 July 2010, the old TSMIT of $45 220 applies. If your sponsor lodged a nomination with the department before 1 July 2010, and that nomination is yet to be decided, the new TSMIT of $47 480 applies.
If your sponsor decides to lodge a new nomination with the department after 1 July 2010, whether that be for yourself, or another overseas skilled worker, the new TSMIT of $47 480 also applies.