International Migrants Still Needed in Australia

Skills Shortage, 457 Visa and the Fair Work Act

Many changes to Workplace Law have been introduced recently and, with more companies now employing internationals, it is vital that these changes be understood in order to continue successfully operating the most effective work practices. Over previous editions we have looked at the Australian Skills Shortage; we are now able to look at how these shortages and the Fair Work Act are linked.

The skills shortage in Australia is still relatively high and once we turn even further away from the financial crisis, these skill shortages look to be greater than ever before. Australia will be forced to obtain skills from overseas through the 457 work visa option or through ENS Employee Nomination Scheme; both are relatively fast in being processed. However, the new rules to this visa, linked with the Fair Work Act changes, make working under this process slightly different.

The changes were introduced to monitor the exploitation of overseas workers; it ensures the overseas workers are skilled at a particular level, as well as overcoming criticisms of the Minimum Salary Level (MSL).

So what do they wish to achieve by the reform? The reform hopes to streamline the process for those low-risk sponsors as well as increase flexibility and mobility for the visa holders. With the greater emphasis on training and development, not only will the overseas workers benefit but also those local Australian employees.

On April 1st, 2009, seven reform measures to the 457 visa were announced. Here we look at the reform which seems to be the biggest question on most organisations’ minds, the Minimum Salary Level

With the implementation of a market base rate for all new and existing 457 visa holders from mid-September 2009, this will result in a fairer, simpler and more transparent method of determining the terms and conditions of employment.

Market Rates
Regimenting the market rates will ensure local labour is not a less attractive option for employers, as well as continuing to provide those industries with needed skills where local labour is unavailable. Overseas workers will also benefit from receiving the same remuneration and working conditions as an equivalent Australian worker doing the same work at the same location.

Guiding Principles
The salary offered should be the same as an equivalent Australian worker at that location; the employer will determine the terms and conditions for the 457 worker in the same way as for an Australian worker. The employer may be required to provide appropriate evidence of these terms to the Department of Immigration and Citizenship (DIAC)

Temporary Skilled Migration Income Threshold (TSMIT)
The commencing TSMIT is $45,220 and will look to be indexed annually; if the Market Rate in the workplace is lower, nomination will be refused. As well as this, the agreed Non-Monetary Benefits can be allowable as long as they are also available to Australian workers.

High Income Threshold
Where nominated salary is above the High Income Threshold, the equivalent terms and conditions assessment does not apply; the level is currently set at $180,000 to align with current top tax margins.

Health Costs
The onus has previously been on the employer to cover health costs of the worker. However, under the new reform, some responsibility shifts to the visa applicant.

Improved information sharing
The Commonwealth and State/Territory government agencies including Taxation, Industrial relations, Workplace Safety, Fair Trading, Registration and Licensing, Law enforcement as well as many others have full transparency between one another.

The introduction and implementation will be a lengthy process with possible disruption to your workplace. At Pendragon we understand these changes and will assist you with ways to work with the new rules while not leaving yourself open to employment issues. This will make the New Year a great one for all concerned.