Five Important Changes to 457 Employer Sponsorship since 1 July 2013

There have been a number of important changes to the Subclass 457 program since 1 July 2013 and every business should be aware of them.

Here are five of the most important changes in brief:

1. Caps on Numbers of Sponsored Employees

Before July last year, there was no limit on the number of employees a Standard Business Sponsor could sponsor on 457 visas.

However, since 1 July 2013, a Standard Business Sponsor has to nominate the number of workers they want to sponsor on 457 visas, and justify that number, as part of the sponsorship approval process.  The Department will approve a specific number of potential 457 visas, and once this cap is reached, the employer has to apply to vary the terms of its sponsorship to be able to sponsor additional employees.

2. English Language Test

Previously, English language testing for 457 applications was only required for trade and technician occupations.

From 1 July 2013, ALL 457 visa applicants have to undergo English language testing, unless they are able to satisfy one of the following exemptions:

The English language test must be completed before lodgement of a 457 visa application. It is a “time of application” requirement. The test usually completed by applicants is the IELTS test, with a score of at least 5 in each of the 4 components required.

Even existing 457 visa holders need to meet the English requirement if they are nominated again for a 457 visa, either when extending their 457 visa with their current employer or transferring to a new employer.

3. Labour Market Testing (LMT)

Labour market testing (LMT) in the Subclass 457 programme was introduced from 23 November 2013.

Standard business sponsors must now test the local labour market before lodging a nomination and provide information with their nomination about their attempts to recruit Australian workers, and how they have determined, on the basis of these attempts, that there is no suitably qualified and experienced Australian citizen or permanent resident, or eligible temporary visa holder, available to fill the position.

The LMT requirement does not apply to nominations lodged by parties to a labour agreement, or where it would conflict with Australia’s international trade obligations.

4. Salary Level Increases

As of 1 July 2013, threshold salary levels increased as follows:

Salary Level  Previous Current Increase
TSMIT (Minimum Salary)  $51,400  $53,900 5%
English Language Waiver  $92,000  $96,400 5%
Market Rate Salary Waiver $180,000 $250,000 39%
5. New Credit Card Surcharge

Previously, there was no credit card surcharge on visa applications.

Since 19 April 2014, a credit card surcharge applies to all transactions using Visa, MasterCard, American Express, JCB and Diners credit cards. The following rates apply:

Visa and MasterCard                           1.08%
American Express and JCB               1.99%
Diners Club International                    2.91%


These changes make it harder for businesses to sponsor overseas skilled workers. It is important to be aware of the extra requirements and to ensure they are met, if visa applications are to be processed as efficiently as possible.

For more information on the above or for any visa related enquiries or assistance, please contact our experienced Employment Law  and Business Migration team:

Phone: +61 2 9895 9208