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Proposed changes to the 457 legislation

The government has introduced into Parliament new legislation to amend the subclass 457 visa program.

The proposed laws, among other changes, introduce:

  • labour market testing for certain occupations
  • impose a new sponsorship obligation in relation to training of Australians
  • introduce enforceable undertakings for sponsors who fail to meet their obligations
  • empower the Fair Work Ombudsmen and Fair Work Inspectors to monitor compliance and enforce the employer sanctions provisions

It is intended that the changes will come into effect on 1 July 2013, with the exception of the labour market testing requirement, providing the Bill is passed through the Parliament and receives Royal Assent.

Details on changes to the subclass 457 visa program proposed by the government are noted below.

Labour Market Testing

The Bill proposes the introduction of a labour market testing requirement as part of the nomination criteria.

The proposed testing will require sponsors to demonstrate that there is no suitably qualified and experienced Australian citizen or Australian permanent resident (Australian) readily available to fill the nominated position.

Exemptions from the requirement to satisfy the testing will be available in the event of:

  • a major disaster to assist relief and recovery
  • Certain Skill level 1 and 2 occupations specified by the Minister or
  • Where specific occupations have been exempted by the Minister in line with Australia’s commitments with respect to labour market testing under relevant international trade agreements.

Where labour market testing will be required, sponsors will need to demonstrate that they have made efforts to find a suitably qualified and experienced Australian for the nominated position within the period of six months prior to lodgement of a nomination application.

Evidence of local recruitment efforts would include:

  • details of advertising for the position
  • participation in job fairs
  • results of recruitment attempts
  • copies of research relating to labour market trends generally and in relation to the nominated occupation.

The labour market testing requirement will not come into effect from 1 July 2013, but rather at a later specified date to allow employers sufficient time to undertake labour market testing.

Training Benchmarks

Under the Bill, subclass 457 visa sponsors will be subject to an obligation to meet the training requirement for the duration of the sponsorship status.

Currently, sponsors are required to commit to training of Australians but the Department of Immigration and Citizenship (DIAC) has limited powers to enforce this requirement. The additional obligation will allow DIAC to sanction sponsors who have not maintained the required training spend during the term of their sponsorship.


The Bill proposes the introduction of enforceable undertakings (promises enforceable in court agreed between the Minister and a sponsor) which will act as an additional measure to administrative sanctions, infringement notices and the civil penalty scheme to enhance the enforcement framework in relation to subclass 457 visa sponsorship.

The enforceable undertakings are designed to secure compensation for any loss incurred as a result of a sponsor’s contravention of the 457 visa program, for example, payment to compensate for underpayment of workers and could be used as an alternative to, or in addition to, barring a sponsor or cancelling a sponsor’s approval.

Fair Work Ombudsman

Further, the Bill also empowers the Fair Work Ombudsman and Fair Work Inspectors to monitor and investigate compliance with the subclass 457 visa program, in particular, to ensure that:

  • sponsored foreign workers are receiving at least the same salary as the salary approved at the nomination stage; and
  • sponsored workers work in the nominated occupation and are performing the duties of the occupation approved at the nomination stage.

Fair Work Inspectors will be granted the same powers of DIAC inspectors. This will increase the current inspectors from 32 to over 300 which will provide the government with a substantially increased capacity to monitor compliance under the 457 visa program.

Inspectors will have the powers to:

  • investigate whether sponsors have contravened employer sanctions provisions
  • monitor a sponsor’s use of other temporary visas which have associated work rights such as student or Working Holiday visas, to ensure all foreign workers are not working in breach of their visa conditions.

Fee changes

Currently the subclass 457 visa fee is $85 for the nomination and $455 for the application. The 457 application fee is beingincreased from $455 to $900 and these increases are due on 1 July 2013.

In addition to this, the government have also proposed the introduction of a new dependant changes. Full details can be found on our supplementary article.

Changes to visa conditions

Currently, subclass 457 visa holders are not allowed to cease employment for a period of 28 consecutive days otherwise they would be in breach of visa condition 8107 and could be subject to visa cancellation. The Bill proposes an extension of this period to 90 days to allow foreign workers sufficient time to find a new sponsor or to arrange their personal affairs following the conclusion of employment with the current sponsor.

Life Relocation will advise clients as further updates become available, however, should any of our clients require further clarification, please feel free to contact our Life’s Migration Team.