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Hiring an overseas worker? Part 1

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For many years, Australia has supported overseas workers to fill short-term skills shortages in the Australian market. The Subclass 457- work visa is the most common visa that allows an employer to sponsor non-Australian employees. As of 31 March 2016, there were 97,770 primary Subclass 457 visa holders in Australia. If you are an Australian business and cannot find Australian employees to fill certain positions in your business, it might be time to look beyond the Australian market and sponsor skilled overseas workers.

This article will discuss how as an Australian business you can go through this process and what applications need to be lodged with the Department of Immigration.

457 Visa program structure

The 457 visa program allows an Australian business to nominate an overseas employer in a position in the business. It is designed not to prejudice the Australian local labour market nor to exploit overseas workers by underpaying them and treating them differently from Australian workers.

For this process, there are three separate applications that need to be submitted and approved before your new employee is ready to work for your business. That includes a Standard Business Sponsor application, a nomination application nominating a specific person in the specific position and finally a Subclass 457 visa for your employee.

Standard Business Sponsor (SBS) Application

You cannot participate in the program until you are approved as a Business sponsor by the Australian government. In summary, in order to be approved, you must:

  • Have an actively and lawfully operating business in Australia (overseas business can also participate in the program)
  • Establish that you meet the training requirements/benchmark if your business have been trading for more than 1 year. Otherwise you need to have a plan to meet the training requirements in the next year. Have commitment towards training your Australian staff in the future once you are approved as a sponsor by meeting the same training benchmarks.
  • Have the financial capacity to meet sponsorship obligations.

If your business has been trading for less than one year, your sponsorship will be approved for 18 months. If your business has been trading for more than one year, then the sponsorship will be valid for 5 years. There is no limit on the number of overseas workers you can sponsor during that time.

As a standard business sponsor, you will have certain obligations you will need to meet/fulfil. We will discuss these obligations along with training benchmarks in our next article.

Nomination application

In addition to becoming an approved standard business sponsor you can nominate a specific overseas worker in the position you need in your business. Main requirements for a nomination application:

  • The position has to be a genuine position that fits within the operations and the scope of your business. For example, a restaurant cannot hire a medical doctor, as it is not a genuine position in the business.
  • The position has to be full-time.
  • The position has to be listed on the relevant list determined by the government (Consolidated Sponsored Occupation List– CSOL).
  • The salary offered to the overseas employee has to be above the minimum threshold, currently being $53,900 + superannuation and be a market rate salary. If you have an Australian worker performing the same role in your business, then the salaries need to be matched (but has to be above the threshold).
  • Your nominated employee needs to establish that they have the required qualification/experience to perform the job.
  • Your employee cannot later perform another position in your business. They must only work in the nominated job. If you want them to work in a different capacity, you might need to lodge a new nomination application with the Department of Immigration.

For some occupations, you will have to test the Australian labour market first before you hire an overseas worker to prove that there was no Australian workers that can fill the position. This requirement is called Labour Market Testing. If you fail to test the market for the required occupations, your application will be refused.

Your business can also sponsor an overseas worker who already has a Subclass 457 visa, however, a new nomination application has to be lodged and approved before your employee can start working for your business.

Subclass 457 Visa application

This is the final application required to allow your employee to hold a valid work visa for Australia. Under a Subclass 457 visa, they can only work for your business full-time in their nominated position.

Your employee generally needs to have enough English ability in order to get the visa being the equivalent of 5 average in IELTS . There are exemption to the English test. One example, is if the salary offered for the position is higher than $96,400.

Also your employee needs to show that they have sufficient skills including sufficient qualifications and/or experience to perform the job. If your employee is a national of Brazil, China, Fiji, Hong Kong SAR, India, Macau SAR, Philippines, South Africa, Thailand, Vietnam or Zimbabwe and working in certain occupations, they might need to obtain a formal skills assessment from Australia in order to be granted a Subclass 457 visa.

‘Top 3’ Facts for Subclass 457 visa program (as of 31 March 2016)

  • Top 3 sponsored occupations groups: Managers, Professional and Technicians and Trade Workers.
  • Top 3 sponsored/nominated occupations: Cook, Developer Programmer and Café/restaurant manager.
  • Top 3 Citizenship countries: India, UK, China.
  • Top 3 states with 457 visas: NSW, Victoria and WA.

Useful tips if you are an overseas employer sponsor

  • There are other pathways to sponsor overseas workers other than the SBS program.
  • Sponsorship might not be required if your overseas worker already holds a visa that allows him/her to work in Australia.
  • Seek legal advice before promoting your overseas worker in a higher position as this might later one harm their opportunity to apply for permanent residency.

About the authors

This article was written by Marial Lewis.

IMPORTANT NOTICE: ImmiAdvisor recommends you obtain your own independent immigration, legal, accounting, financial or taxation advice as appropriate. It is solely your responsibility to evaluate the accuracy, completeness and usefulness of all information provided through this blog/website. In no event will ImmiAdvisor Pty Ltd be liable to you or anyone else for any decision made or action taken by you or anyone else in reliance upon any information contained on or omitted from this blog/website.


Marial Lewis

Marial is an accredited specialist lawyer in Immigration Law and a multi-award…

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