Market Salary Rates from 14 September 2009 (Subclass 457)

Market Salary Rates from 14 September 2009 (Subclass 457)

Minster Evans has announced the market salary rates requirements for temporary skilled overseas workers which will come into effect from 14 September 2009. These are a result of the Migration Legislation Amendment (Worker Protection) Act 2008 and associated regulations.

These market rates will apply to all new subclass 457 visa holders from 14 September 2009, except where annual earnings of $180,000 or more are proposed.

For current subclass 457 visa holders, transitional arrangements will allow employers currently paying less than market salary rates to have until 1 January 2010 to commence paying market rates.

  • $81,040 for Subclass 457 visa holders who benefit from the English language exemption
  • $55,725 for Subclass 457 visa holders working in Information and Communication Technology (ICT) occupations who were granted their visa under certified regional employment arrangements
  • $61,920 for all other Subclass 457 visa holders working in ICT occupations
  • $40,705 for all other Subclass 457 visa holders who were granted visas under certified regional employment arrangements
  • $45,220 for all other Subclass 457 visa holders.
How the market salary rate is determined:

a) if there is an equivalent Australian worker in the workplace:- the market rate will be determined by the industrial arrangements that apply to this worker – for example, a collective agreement, award, award conditions with above award salary rates or a common law contract [This may be referred to as the ‘site’ or ‘enterprise’ rate].

b) if there is no equivalent worker onsite:- the employer may reference collective agreements or awards for that position to substantiate the market rate. If there is no applicable agreement or award, other evidence such as remuneration surveys or earnings data must be provided.

In this case it is the sponsor’s responsibility to identify market terms and conditions of employment supported by a range of evidence.


Temporary Skilled Migration Income Threshold (TSMIT)

The Temporary Skilled Migration Income Threshold (TSMIT) commences on 14 September 2009 and is currently $45,220 per annum.

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.

The TSMIT has no bearing on what the Subclass 457 visa holder should be paid in the workplace.

Example given by DIAC
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 $45,220, 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.

Current nomination applications will be assessed against the new nomination criterion, and DIAC will contact sponsors to seek further information.
Current nomination approvals where the 457 applicant is specified will be processed under the new legislation.

From 14 September 2009, current nomination approvals where the 457 applicant is not specified will not be valid. The 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.

Monitoring

There will be specially trained officers with investigative powers to monitor workplaces and conduct site visits to determine whether employers are complying with the redefined sponsorship obligations.

Breach of sponsorship obligations could result in fines up to $33,000, the cancellation of an employer's approval as a sponsor or barring them from making further applications for overseas workers.

DIAC can also obtain information from the Commissioner of Taxation to ensure correct salary levels are being paid to visa holders.

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