Wide-ranging changes to the 457 'work' visa and other temporary visa arrangements took effect Monday 14 September 2009 with the introduction of the Migration Legislation Amendment (Worker Protection) Act 2008 (Cth). The changes include: how new and existing 457 visa holders must be paid and at what rate; the introduction of new obligations and sanctions; strengthening training standards that need to be met to become an approved sponsor or to renew an existing sponsorship; and other important changes to visa requirements.

Market salary rates of pay and equivalent terms and conditions

Sponsors must provide equivalent terms and conditions of employment to sponsored visa holders granted visas from 14 September 2009 onwards. This means that they will need to pay visa holders market salary rates unless the visa holder's annual earnings are $180,000 or above.

Sponsors of existing 457 visa holders who were granted visas before 14 September 2009 will have until 1 January 2010 to realign salaries to the new standard.

Nominations will not be approved if the base salary or the market salary rate is below the Temporary Skilled Migration Income Threshold (TSMIT). The TSMIT is set at $45,220 and will be indexed annually.

Sponsorship obligations and sanctions

Sponsorship obligations

From 14 September 2009 all existing, former and new sponsors will need to:

  • pay return travel costs for sponsored employees and any accompanying family members where a written request for payment has been made in accordance with guidelines;
  • pay costs incurred by the Commonwealth Government in relation to the location and removal of any sponsored employee or any accompanying family members (up to a maximum of $10,000 per person);
  • provide equivalent terms and conditions of employment to the sponsored visa holder employee as are or would be provided to an Australian employee;
  • maintain and provide certain records and information in a manner and within timeframes specified;
  • inform the Department of Immigration & Citizenship (DIAC) when certain events occur, including the cessation of employment of a sponsored employee, a change to work duties to be performed by the sponsored employee and certain other events;
  • ensure that the sponsored employee works only in the occupation for which their visa was approved;
  • co-operate with inspectors who have expanded powers of entry, search and investigation; and
  • not recover any costs from the sponsored employee or accompanying family member in relation to all or part of the costs for recruitment and immigration.

Health insurance

Sponsors are no longer liable for public hospital costs of sponsored employees and accompanying family members who are granted 457 visas on or after 14 September 2009. Sponsors remain liable for public hospital costs incurred by sponsored employees who were granted visas prior to 14 September 2009, and should ensure that these employees at all times hold private health insurance until they are granted a new visa.

From 14 September 2009 all 457 visa applicants will be required to show evidence of having adequate health insurance before their visa is granted. DIAC will monitor compliance through information obtained from health insurers. Visa applicants will need to take out policies in Australia that meet certain guidelines. While in practice employers can take out appropriate health insurance on behalf of their sponsored employees and families, the legal responsibility for complying with this requirement and the consequences of failing to do so rest with the visa applicant. Failure to comply with this condition may result in cancellation of the visa. Visa holders will be liable for payment of any costs not covered by insurance.

Sanctions and penalties

Non-compliance with sponsorship obligations can lead to serious consequences, including:

  • warning notices (which will be recorded);
  • infringement notices for which fines will be incurred at one-tenth of the civil penalty maximum for a first offence, and one-fifth of the civil penalty maximum for subsequent offences;
  • administrative sanctions such as barring a sponsor from future applications for sponsorship, nomination or visas for a period of time, or cancelling the sponsorship (and potentially all associated visas); and
  • civil penalties imposed by a court of up to $33,000 for a body corporate or $6,600 for an individual for each failure to comply.

The new penalty provisions will apply to all existing, former and new sponsors from 14 September 2009 onwards.

Sponsorship criteria

Employers will need to demonstrate that they can meet certain training 'benchmarks' if they have been trading in Australia for more than 12 months, including a requirement that an amount equivalent to at least 1% of payroll expenditure is devoted to training. Employers who have been trading in Australia for less than 12 months need to provide an auditable training plan capable of meeting the training benchmarks.

Other changes

Other important changes include:

  • 457 visas may be granted with less than three months validity, suggesting that there will be increased scrutiny of people who may be using the business visit visa to work;
  • removing the need to apply for a new visa if a nomination has been approved that authorises an existing 457 visa holder to work in a different occupation. However, for people granted a 457 visa before 14 September 2009, employers may want to avoid liability for public health costs and require them to apply for a new 457 visa;
  • visa holders cannot cease employment for more than 28 days. Failure to comply may result in DIAC taking action to cancel the visa, locate and remove the visa holder and any accompanying family members. Sponsors are liable for these costs which can be up to $10,000 per sponsored person;
  • amendments to make it easier for DIAC to require formal skill assessments in certain cases; and allowing people sponsored in specified occupations to work as independent contractors.


Sponsors should ensure that they review their current arrangements and align them to the new obligations to avoid any breaches and consequential sanctions or penalties. Employment agreements may need to be reviewed to provide clarity about employer and employee responsibilities that are specific to overseas workers and to minimise the risk of non-compliance with immigration laws.