Please be aware that the Subclass 457 Temporary Work (Skilled) visa has been replaced with a new Subclass 482 Skill Shortage (TSS) visa as of the 18th March 2018. You can read more about these changes in our articles on the abolishment and replacement of the Subclass 457 visa and Subclass 482 – A Guide to Temporary Skills Shortage.

Recently, Labor wanted to pressure the Government into increasing the Temporary Skilled Migration Income Threshold (TSMIT) from its current benchmark of $53,900 to $57,000 and reinstate the annual indexation of TSMIT.  However, the Government has only agreed to review how TSMIT is currently derived and that it will only consider the reintroduction of indexation, providing an appropriate and equitable methodology can be reached.

The TSMIT means that a sponsored overseas worker must be paid above the prescribed rate.    Working hours are governed by the provisions of any relevant Award, Collective Agreement or general Industrial Relations Laws.

Prospective Australian Business (employer) Sponsors should note that while a sponsored worker must be paid above TSMIT, whatever the sponsored worker is paid, must be equivalent to what would be paid to an Australian worker, performing the same role.  The Department of Immigration and Border Protection (DIBP) introduced this concept, so that they could be satisfied that the ‘terms and conditions of employment’, including remuneration, are at the same rate and equivalent for both Australian workers and sponsored overseas workers.

The salaries/wages provided are examined, exclusive of superannuation.  If the payments include penalty rates or industry allowances, in order that the salary/wage on offer is above TSMIT, then those payments must be guaranteed.  In order for the Market Salary Rates principle to be met, an employment contract for the sponsored worker must be provided, which clearly stipulates that earnings on offer are guaranteed.  Further, to provide evidence that Australian workers, performing the same role, are employed under equivalent ‘terms and conditions’, including remuneration, the relevant section of an Award or Collective Agreement which applies to a particular industry or workplace, may be provided, as long as it clearly indicates the guaranteed earnings.

In the absence of such documents, a payslip (with identifier removed) of an equivalent Australian worker may be provided, so that the Market Salary Rates principle is met.  Remembering, if a payslip is provided for the equivalent Australian worker, it must indicate a rate of earnings equal to that being offered to the overseas sponsored worker.