The Federal government has recently released details of the Migration Amendment (Temporary Sponsored Visas) Bill 2013. According to the government, the Bill seeks to enhance the ability of the Department of Immigration and Citizenship (DIAC) to monitor and deter sponsor behaviour which is inconsistent with the policy intent of the Temporary Sponsored Visa Program. Important measures in the Bill include the introduction of labour market testing for 457 nomination approval, increased monitoring of employers, and changes to the time limits for 457 holders ceasing employment. While the changes are only proposed at this stage, clients should be mindful of how these amendments will affect their ability to nominate and employ overseas workers on 457 visas.

The government has indicated that it is concerned with the recent growth of the 457 program, and the measures in the Bill are aimed at ensuring that the use of overseas workers does not adversely impact the local labour market. The package of reforms announced by the Minister will make it more onerous for employers to sponsor 457 holders, as well as allowing for increased monitoring of sponsors through the Fair Work Ombudsman and Fair Work inspectors. Businesses that currently use the 457 program (and those that expect to employ overseas workers in the future) need to be aware that the changes will likely increase the time and costs involved in sponsoring 457 visa holders. With the exception of labour market testing, most of the proposed changes are expected to be implemented from 1 July 2013.

Key Changes

The following changes to the existing 457 requirements are proposed:

Labour market testing

In an effort to ensure that businesses are not employing overseas workers in preference of Australian citizens and permanent residents, the Bill contains measures requiring nominations to be accompanied by evidence of labour market testing. Employers will need to demonstrate their efforts to recruit a suitably-qualified local employee in the six months before applying for nomination approval.

The requirement will be satisfied if the employer provides evidence of attempts to recruit an Australian employee to the position, such as advertising or participating at relevant job fairs. The government has indicated that the proposed requirements will not contravene Australia’s international trade obligations, and legislated exemptions will apply.

Exemptions will be made by legislative instrument, and could include specific highly skilled occupations within the Australian and New Zealand Standard Classification of Occupations (ANZSCO). Exempt occupations will need to be specified by the Minister, and generally would require either a Bachelors degree or Diploma (within the Australian Qualifications Framework). It is expected that some Professional and Managerial occupations may be exempt, but Trade occupations will be covered by the requirement for labour market testing. Further exemptions may apply for major disasters, where there is a need for urgent assistance with disaster relief or recovery.

Importantly for clients, the requirement for labour market testing is not expected to take effect on 1 July 2013. The implementation will be delayed until a date to be determined to allow sufficient time for employers to familiarize themselves with the new requirements and undertake recruitment activities.

Increased powers of the Fair Work Ombudsman and Fair Work investigators

The Bill proposes to strengthen enforcement and monitoring of businesses’ compliance with their sponsorship obligations. Currently, DIAC has just over 30 staff responsible for monitoring of sponsors nationwide. The Bill proposes to empower the Fair Work Ombudsman and Fair Work Inspectors to investigate and enforce compliance with sponsorship obligations. More than 300 current Fair Work Inspectors will be able to ensure overseas employees work in their nominated occupation and are paid market salary rates.

Inspectors will also have powers to investigate employers’ use of other visas that have associated work rights but do not require formal sponsorship (including student or working holiday visas). This will allow inspectors to investigate potential breaches of visa conditions beyond those associated with the 457 program.

Existing migration legislation already contains an enforcement framework with administrative sanctions, including barring or cancelling visa approval. The Bill extends this by providing for ‘enforceable undertakings’, to be published on the DIAC website, as an additional measure where an employer fails to satisfy a sponsorship obligation. These could be used as an alternative to, or work in combination with, barring or cancelling a sponsor’s approval.

Extension of time limit for transferring sponsors

Under existing requirements, 457 holders are required to obtain a new sponsor, apply for another visa, or depart Australia, within 28 days of ceasing employment with their sponsoring employer. In practice however, this time limit is often extended at the discretion of the Department to allow visa holders a degree of flexibility.

The Bill proposes to formalise these arrangements, extending the period by which 457 visa holders must find a new sponsor after ceasing employment to 90 days.


The government has stated that the Bill balances ‘the interests of Australian workers with the need to strengthen protections for overseas workers’. Increased enforcement of sponsorship obligations should indeed minimise abuses of the 457 visa. However coupled with the recent announcement of a near doubling of the 457 visa application charge to $900, the Bill further extends the regulatory burden on genuine users of the Temporary Sponsored Visa program. 

While the measures are yet to receive legislative assent, clients should be aware of these proposals and the impact they will have on hiring and sponsoring overseas workers. Businesses should have procedures in place to ensure compliance with migration legislation, and to avoid investigations and the potential consequences.