457 - $78k minimum salary? The proposed changes could mean the end of this subclass

[BELAW]

A parliamentary committee report was released on 17 March 2016 analysing, and making suggestions to improve, the 457 visa program.

Under the title “National Disgrace: The Exploitation of Temporary Work Visa Holders” the committee made several recommendations which, if made it into legislation, may effectively kill the whole program.

(link to the report)

 

Some of the report's recommendations are welcome, however there are two key points most 457 sponsors will not be able to justify:

 

 

 

• Current training benchmarks to be replaced with a training levy of up to $4k payable per 457 visa holder in the business.
  
• Temporary Skilled Migration Income Threshold (TSMIT) indexed to average full time weekly ordinary time earnings (AWOTE) as at 1 July 2015 and that indexation occur each financial year.
  

 

 

This latter (recommendation 5 in the report) is of particular concern because of the confusing nature of the AWOTE.

 

According to the ABS, the national average salary for full-time employees (the AWOTE) is around $78k currently (link). However, this figure is skewed by the inclusion of all high-income (>$200k) professionals, such as equity partners in national law firms, various senior engineers, investment bankers, you name it.

 

The AWOTE may be average of what all full time employees earn, but you can't take it for an expected salary for the average person.

 

The CSOL list shows the occupations eligible for 457, including positions like hairdresser or cook.

 

But how would future 457 sponsors be able to justify a $78k salary paid to a hairdresser?

Even if they were willing to pay such an inflated wage, how could they produce any market data that supported this being a reasonable salary in that industry?

 

While some of the report's recommendations would serve to reduce potential exploitation of 457 visa holders, I sincerely hope that not all suggestions will make it into legislation.

 

 

Daniel Chang | Principal solicitor / MARN 1463945

BELAW (Bottoms English Lawyers)

[VERYSTORMY]

Sorry, but it sounds sensible to me.

 

I have often shook my head in disbelief at some of the occupations that are sponsored. As for the $4k for training per sponsor, it should have a zero on the end. The only reason business loves migration is because in the last 25 years, business has developed a mind set of not wanting to train people and instead wants them ready trained. That is bad for the economy, bad for people and ultimately bad for business. Do we "really need" to bring in cooks from other parts of the world!

[bell123321]

I think the $78k is to high! My OH is a chef and when we have researched the average salary seems to be around $50-$60k way off the 78k suggested. Why not bring in Cooks/chefs from the other side of the world if locals do not want to do those jobs? If people locally want those positions then they should go college and obtain the qualifications and work experience to do so. It was really hard for my OH to get a cook then chef job because everyone wants experience even in the UK. Several years ago he ended up working voluntary whilst doing a college course just to get some experience. This enabled him then to get a cook position even though his qualification was over qualified, after some years experience as a cook he managed to get a chef job (For what his qualification was related to).

[joeperth]

Sounds reasonable to me

[Guest]

I think the $78k is to high! My OH is a chef and when we have researched the average salary seems to be around $50-$60k way off the 78k suggested. Why not bring in Cooks/chefs from the other side of the world if locals do not want to do those jobs? If people locally want those positions then they should go college and obtain the qualifications and work experience to do so. It was really hard for my OH to get a cook then chef job because everyone wants experience even in the UK. Several years ago he ended up working voluntary whilst doing a college course just to get some experience. This enabled him then to get a cook position even though his qualification was over qualified, after some years experience as a cook he managed to get a chef job (For what his qualification was related to).

 

So presumably he would have been pretty miffed if a UK restaurant sponsored a chef from Australia who had several years experience rather than giving your husband as a newly qualified chef the job and giving him on the job development? I know I would be and that's the position in Australia, I very much doubt there is a shortage of people who want to train for most of the jobs on the SOL/CSOL but employers only want qualified and experienced people which is absolutely wrong and they should not be allowed to get away with it.

 

I understand why it's good for you as an individual - I also went over on a 457 visa but again my government employer could have invested in training people - the first time I recruited an Australian my Australian manager questioned my decision and asked if I was sure they were good enough - that's a disgrace.

 

In the UK at the moment we have a nurse shortage, we are actively recruiting from overseas AND we have a shortage of training places....you really have to wonder!!

[bell123321]

So presumably he would have been pretty miffed if a UK restaurant sponsored a chef from Australia who had several years experience rather than giving your husband as a newly qualified chef the job and giving him on the job development? I know I would be and that's the position in Australia, I very much doubt there is a shortage of people who want to train for most of the jobs on the SOL/CSOL but employers only want qualified and experienced people which is absolutely wrong and they should not be allowed to get away with it.

 

I understand why it's good for you as an individual - I also went over on a 457 visa but again my government employer could have invested in training people - the first time I recruited an Australian my Australian manager questioned my decision and asked if I was sure they were good enough - that's a disgrace.

 

In the UK at the moment we have a nurse shortage, we are actively recruiting from overseas AND we have a shortage of training places....you really have to wonder!!

 

To be fair if a chef from Australia got sponsored because they had more experience then my husband as a newly qualified chef I would completely understand, employers want the best. In fact when he was applying for cook positions a lot of Europeans got the position over my husband. It has all worked out eventually but it was difficult to get his foot in the door so to speak. Yes there should be more training opportunities to take people freshly qualified but in a lot of jobs it doesn't work that way unfortunately. I wish more employers took on newly qualified or trained more in house but its the same in a lot of countries.

 

I have noticed with the NHS there is a lot of overseas recruitment, in fact I had an op last week and everyone apart from 1 person I spoke to struggled with English, so I am assuming (I could be wrong) they were recruited from overseas. Like you said there is a shortage of training places for nurses so doesn't really make sense.

[Pb65]

Seems to be a common theme here as even the UK are implementing a minimum salary (GBP 35k) in some cases unrealistic for certain categories of potential migrants who have lived/worked in UK for 5 years https://petition.parliament.uk/petitions/118060.

[Sustain]

How about a maximum salary for politicians

 

Training should be a material component of employment costs, not a rounding

[Woody]

If you question the need to bring chefs in from overseas you have never tried to recruit one. The world over it is a nightmare to recruit decent chefs. A lot now want the glory without the hard work or they want to work in the high profile kitchens. Trying to recruit and retain a decent chef in an average setting is really hard (and the key word is decent ).

[Raul Senise]

A parliamentary committee report was released on 17 March 2016 analysing, and making suggestions to improve, the 457 visa program.

Under the title “National Disgrace: The Exploitation of Temporary Work Visa Holders” the committee made several recommendations which, if made it into legislation, may effectively kill the whole program.

(link to the report)

 

Some of the report's recommendations are welcome, however there are two key points most 457 sponsors will not be able to justify:

 

 

 

• Current training benchmarks to be replaced with a training levy of up to $4k payable per 457 visa holder in the business.

• Temporary Skilled Migration Income Threshold (TSMIT) indexed to average full time weekly ordinary time earnings (AWOTE) as at 1 July 2015 and that indexation occur each financial year.

 

 

This latter (recommendation 5 in the report) is of particular concern because of the confusing nature of the AWOTE.

 

According to the ABS, the national average salary for full-time employees (the AWOTE) is around $78k currently (link). However, this figure is skewed by the inclusion of all high-income (>$200k) professionals, such as equity partners in national law firms, various senior engineers, investment bankers, you name it.

 

The AWOTE may be average of what all full time employees earn, but you can't take it for an expected salary for the average person.

 

The CSOL list shows the occupations eligible for 457, including positions like hairdresser or cook.

 

But how would future 457 sponsors be able to justify a $78k salary paid to a hairdresser?

Even if they were willing to pay such an inflated wage, how could they produce any market data that supported this being a reasonable salary in that industry?

 

While some of the report's recommendations would serve to reduce potential exploitation of 457 visa holders, I sincerely hope that not all suggestions will make it into legislation.

 

 

Daniel Chang | Principal solicitor / MARN 1463945

BELAW (Bottoms English Lawyers)

 

You have miss read the report as it does not recommend increasing TSMIT to $78,000.

 

The report recommends that TSMIT be indexed in line with the average full time weekly ordinary time earnings (AWOTE) yearly increase, which for last year increased by 1.6 %.

 

As such if the recommendations were adopted (which there is nothing to say that they will be) TSMIT could increase by the same percentage as the (AWOTE), thus a 1.6% increase.

 

Of more concern in my opinion, are the recommendations in regards to training as this will harm Australian workers currently receiving increased training opportunities due to the 457 training benchmarks. Forcing employers to pay towards a Government "training" fund instead of training their own staff is a ridiculous recommendation.

[MaggieMay24]

My company uses the 457 program regularly, so we always have 3 or 4 people on this visa. Virtually all of our 457 visa holders (including myself) come through intra-company transfers. I don't have any issue with the program as a whole, and hope whatever changes may be implemented will help us continue to use it. We already spend quite a bit on training so meet the 1% benchmark without too much difficulty, but I'm not sure how happy management would be to pay a levy on top of that.

[northshorepom]

You have miss read the report as it does not recommend increasing TSMIT to $78,000.

 

The report recommends that TSMIT be indexed in line with the average full time weekly ordinary time earnings (AWOTE) yearly increase, which for last year increased by 1.6 %.

 

As such if the recommendations were adopted (which there is nothing to say that they will be) TSMIT could increase by the same percentage as the (AWOTE), thus a 1.6% increase.

.

 

Yes, i was going to make that point

 

This is a senate inquiry report. As such it requires a response from the relevant government department but it does not mean any or all of its recommendations are likely to be proposed by government. The inquiry committee had a majority of opposition senators on it so it's not surprising that of its 33 recommendations, 17 of them are opposed or rejected by the government-aligned senators who sat on the inquiry.

 

In other words, some of this might make it into govt policy if the ALP win the forthcoming federal election. Almost none of it will if the Coalition win

 

I recommend reading the report - have just skimmed so far. There is some interesting data in there, particularly in respect of the proportion of PR visas granted that are granted to people already in Aus on temporary visas, plus the significance (or not) of the 457 program in respect of the proportion of temporary residents in Australia at any one time

[BELAW]

You have miss read the report as it does not recommend increasing TSMIT to $78,000.

 

The report recommends that TSMIT be indexed in line with the average full time weekly ordinary time earnings (AWOTE) yearly increase, which for last year increased by 1.6 %.

 

As such if the recommendations were adopted (which there is nothing to say that they will be) TSMIT could increase by the same percentage as the (AWOTE), thus a 1.6% increase.

 

I sure hope so; it would make better sense. To be honest, the current TSMIT is already a factor eliminating most potential 457 applications here in far north Queensland. The average salaries in Cairns (as well as property rental expenses) are much lower than, say, in Sydney. Graduate lawyer $45k, office manager $40-45k, reception $35-40k - it's impossible to produce "labour market testing" showing that cooks usually earn above $54k. Thus a lot of occupations otherwise available on the CSOL are ineligible for a 457 nomination in places like Cairns.

[BELAW]

I have often shook my head in disbelief at some of the occupations that are sponsored. As for the $4k for training per sponsor, it should have a zero on the end. The only reason business loves migration is because in the last 25 years, business has developed a mind set of not wanting to train people and instead wants them ready trained. That is bad for the economy, bad for people and ultimately bad for business. Do we "really need" to bring in cooks from other parts of the world!

 

When a 457 visa is used as a cheaper alternative to employing an equivalent Australian - I agree. That's not what the program is for; that is sort of an abuse of the system.

 

On the other hand, our experience in the far north is quite different. We see restaurants turning to the 457 option when they can't find anyone locally.

 

It's not like there are hundreds of qualified local cooks looking for work, but the businesses just choose to dismiss them. Instead, you'd see a "positions available" sign posted on most restaurant windows around here, and so once a foreigner on a student visa applied for the job and was found suitable - the restaurant naturally wants to hang on to them. No, they don't recruit directly from overseas, and they're not choosing foreigners over locals - at least based on our admittedly limited personal experience. Having to pay for the sponsorship and nomination costs, plus all the administration coming with the visa is a big enough deterrent already. I acknowledge though, that this may not apply to all industries or all of Australia.

 

Your other point regarding training: I'm not a fan of the idea that training is an employer responsibility. Sure, if we make restaurants pay for keeping their staff's RSA and first aid certificates current - that's reasonable. But regardless of immigration, not many businesses would be prepared to spend $4k per person on training and why should they. If you run a mechanic workshop you wouldn't hire an untrained person for a mechanic, to later train them up at your own expense. Of course you expect to employ people who are suitable and qualified for the tasks you give them...

[Raul Senise]

Sorry, but it sounds sensible to me.

 

I have often shook my head in disbelief at some of the occupations that are sponsored. As for the $4k for training per sponsor, it should have a zero on the end. The only reason business loves migration is because in the last 25 years, business has developed a mind set of not wanting to train people and instead wants them ready trained. That is bad for the economy, bad for people and ultimately bad for business. Do we "really need" to bring in cooks from other parts of the world!

 

Under the current scheme, employers must spend 1% of their total yearly payroll on training their Australian staff. Most employers I deal with are spending much more than that already, with many spending way beyond this requirement. Forcing employers to give money to the Government will leave less money for training of their staff. This recommendation would hurt the genuine employers who already regularly spend money to up skilll their Australian workforce.

 

As for why do we need to sponsor cooks, because there is a huge shortage. The reason for the shortage is that Australians are not taking on the trade, as few want to do the apprenticeship. Of the small numbers who do start an apprenticeship, few stick it out when they see that the reality of a commercial kitchen is nothing like Master Chef.

[flag of convenience]

The system has long been open to abuse and hopefully this will be tackled. I recall a poster on this thread, a supporter of the 457, claiming this position was for very highly paid and very pro the scheme.

 

Fact being low paid workers have been brought in to work in construction, meat works, and goodness knows what else. Time the visa was over hauled as long advocated and employers seek local workers first and the need provide evidence of that is again restored.

[Man from Snowy Mountain]

457 is not the only visa being abused. Working holidays also where overseas workers cant get fair wages working in the farm, factories, etc. You have student visas working seven 11 far lower than minimum wage. Worst, these working holidays and students they may lose their visas if they go against their employers who threaten them not to renew/continue their stay in Australia. These abuses are nothing new and are not unique just in Australia. Even I sit in HK can see these abuses widely broadcasted via ABC from Four Corners. These abuses happen all around us and we need to keep on high alert about employer abuses.

 

The system has long been open to abuse and hopefully this will be tackled. I recall a poster on this thread, a supporter of the 457, claiming this position was for very highly paid and very pro the scheme.

 

Fact being low paid workers have been brought in to work in construction, meat works, and goodness knows what else. Time the visa was over hauled as long advocated and employers seek local workers first and the need provide evidence of that is again restored.

[flag of convenience]

I sure hope so; it would make better sense. To be honest, the current TSMIT is already a factor eliminating most potential 457 applications here in far north Queensland. The average salaries in Cairns (as well as property rental expenses) are much lower than, say, in Sydney. Graduate lawyer $45k, office manager $40-45k, reception $35-40k - it's impossible to produce "labour market testing" showing that cooks usually earn above $54k. Thus a lot of occupations otherwise available on the CSOL are ineligible for a 457 nomination in places like Cairns.

 

What would make sense is training some of the very high rate of FNQ youth unemployed, rather than making excuses to bring in foreigners, in an already heavily backpacker subsidised employment region.

[Guest The Pom Queen]

When a 457 visa is used as a cheaper alternative to employing an equivalent Australian - I agree. That's not what the program is for; that is sort of an abuse of the system.

 

On the other hand, our experience in the far north is quite different. We see restaurants turning to the 457 option when they can't find anyone locally.

 

It's not like there are hundreds of qualified local cooks looking for work, but the businesses just choose to dismiss them. Instead, you'd see a "positions available" sign posted on most restaurant windows around here, and so once a foreigner on a student visa applied for the job and was found suitable - the restaurant naturally wants to hang on to them. No, they don't recruit directly from overseas, and they're not choosing foreigners over locals - at least based on our admittedly limited personal experience. Having to pay for the sponsorship and nomination costs, plus all the administration coming with the visa is a big enough deterrent already. I acknowledge though, that this may not apply to all industries or all of Australia.

 

Your other point regarding training: I'm not a fan of the idea that training is an employer responsibility. Sure, if we make restaurants pay for keeping their staff's RSA and first aid certificates current - that's reasonable. But regardless of immigration, not many businesses would be prepared to spend $4k per person on training and why should they. If you run a mechanic workshop you wouldn't hire an untrained person for a mechanic, to later train them up at your own expense. Of course you expect to employ people who are suitable and qualified for the tasks you give them...

The issue you have in Cairns is that to do the Cert III in Commercial Cookery at TAFE you need an apprenticeship. None of the restaurants want to know, why should they when they can get someone in already qualified. My middle son wants to be a chef, he can't get an apprenticeship. He had one at Wink on the Esplanade and they went in to receivership, he went to Sauce at the pier they also went in to receivership. The only other restaurant to take on apprentices is Splash. So as you can see there are many locals in FNQ who want to become a chef but can't because of how the course is run.

[flag of convenience]

The issue you have in Cairns is that to do the Cert III in Commercial Cookery at TAFE you need an apprenticeship. None of the restaurants want to know, why should they when they can get someone in already qualified. My middle son wants to be a chef, he can't get an apprenticeship. He had one at Wink on the Esplanade and they went in to receivership, he went to Sauce at the pier they also went in to receivership. The only other restaurant to take on apprentices is Splash. So as you can see there are many locals in FNQ who want to become a chef but can't because of how the course is run.

 

Of course there are many locals 'missing out' under the scam of the 457 or of what it became. Why train a local with the costs involved when can bring in a foreigner that is obliged to be docile and obeying/committed under visa restrictions. Include dish washers in that as well.

[flag of convenience]

While it's on my mind lets not forget the ALP's proposal last year. The ALP has a compromise to the China Australia Free Trade Agreement (although most know nothing is free, but I digress) wanted to raise the minimum wage for workers being brought in on a 457 from a miserly fixed $53,500 to a hardly generous indexed $57,000 which saw business lobbyists and Chamber of Commerce becoming outraged at such a proposal.

The same old turkey's being hauled out. Rural Australia would suffer. And so on.

 

What would and does suffer IMO is the inability of rural/country youth to obtain training positions in the first place with 457's being more profitable, by means of having a docile and regulated employee, difficult to leave employers service unless sacked, I mean how attractive can that be?

[flag of convenience]

Oh, and some 27% of all 457 visa grants last year fell under the proposed ALP increase to $57,000. Talk about the importation of cheap labour.

[BELAW]

The issue you have in Cairns is that to do the Cert III in Commercial Cookery at TAFE you need an apprenticeship. None of the restaurants want to know, why should they when they can get someone in already qualified. My middle son wants to be a chef, he can't get an apprenticeship. [...] So as you can see there are many locals in FNQ who want to become a chef but can't because of how the course is run.

 

That surprised me. We go through a fair number of applications (not just 457) where the foreign student undertakes a c3 then a c4 in commercial cookery (total of 2 semesters), then a diploma of hospitality management. Each of those courses have a work experience component but that's just a few weeks and not a year or two apprenticeship. And from what I hear from the sponsoring employers, they don't seem to pick on qualifications at all.

 

Is it possible that maybe just the TAFE pathway is structured inconveniently? Because I can imagine (and to some extent, understand) employers not wanting to take on "apprentices" but wouldn't they employ your son just as a regular cook in their kitchen already? Which could either lead to internal promotion fairly soon and thus becoming a chef without the DipHM, or he may choose the DipHM instead of the apprenticeship based pathway like all those student visa holders studying at Holmes and elsewhere... I don't know; I'm not an expert on the hospitality industry it just doesn't match my day-to-day experience at work.

[Guest The Pom Queen]

That surprised me. We go through a fair number of applications (not just 457) where the foreign student undertakes a c3 then a c4 in commercial cookery (total of 2 semesters), then a diploma of hospitality management. Each of those courses have a work experience component but that's just a few weeks and not a year or two apprenticeship. And from what I hear from the sponsoring employers, they don't seem to pick on qualifications at all.

 

Is it possible that maybe just the TAFE pathway is structured inconveniently? Because I can imagine (and to some extent, understand) employers not wanting to take on "apprentices" but wouldn't they employ your son just as a regular cook in their kitchen already? Which could either lead to internal promotion fairly soon and thus becoming a chef without the DipHM, or he may choose the DipHM instead of the apprenticeship based pathway like all those student visa holders studying at Holmes and elsewhere... I don't know; I'm not an expert on the hospitality industry it just doesn't match my day-to-day experience at work.

Cairns TAFE states

Apprentices: Need to be 15 years of age or older and must be employed to qualify for an apprenticeship. You can be an existing employee or a new employee (less than three months full time). It is recommended that prospective apprentices complete year 10 or equivalent with sound achievement in English and Maths and have good communication skills. All apprentices are required to complete a literacy and numeracy assessment.

 

Employers: Required to provide the necessary human and physical resources to qualify for an apprentice. For the benefit of both parties a probation period of 30 days for non-school based apprentices and three months for school based apprentices will apply to all traineeship contracts.

They can't employ my son as a regular cook because he isn't qualified as a cook as again they need the Cert III which as above they can't get without an apprenticeship.

 

Yet they allow an overseas student to study full time http://tafenorth.edu.au/course/14630/certificate-iii-commercial-cookery where is the sense in that?

[bell123321]

The issue you have in Cairns is that to do the Cert III in Commercial Cookery at TAFE you need an apprenticeship. None of the restaurants want to know, why should they when they can get someone in already qualified. My middle son wants to be a chef, he can't get an apprenticeship. He had one at Wink on the Esplanade and they went in to receivership, he went to Sauce at the pier they also went in to receivership. The only other restaurant to take on apprentices is Splash. So as you can see there are many locals in FNQ who want to become a chef but can't because of how the course is run.

 

sorry to hear about the struggles your son is facing! My husband tried the apprenticeship route too here in the U.K. But as he was late 20s at the time nobody wanted to know. They only wanted to take on 16-18 year olds as thy received more funding then taking on a mature student. In the end we ended up funding a diploma at college for him which helped for him to get a cook job (no chef positions would take him due to only having the qualification and not much experience apart from 6 months voluntary work). Once he did the cook job for a while he managed to get noticed for chef positions as he had experience working in a commercial kitchen with loads of pressure. Is it possible for your son to do the qualification separately?

 

I agree wih the comment about chef being nothing like master chef! My husband says its a super stressful job but is really re-warding at the same time but it is a job with such a high turnover. His seen so many people come and go in a short amount of time.

Edited March 24, 2016 by bell123321