The 457 visa program

The 457 visa program is designed to enable businesses to address Australian labour market skills shortages and is Australia's most commonly used method of employing overseas workers. The program involves a three stage process:

  • Standard business sponsorship application
  • Nomination application
  • 457 visa application

Which businesses can use the 457 visa program?

Employers that are legally established and lawfully operating a business inside or outside of Australia can apply to become approved standard business sponsors. Overseas employers can use the program if they want to establish a business operation or fulfill a contractual obligation in Australia (overseas employers don't need to meet 'Training Benchmark' requirements).

As a result of a recent change in policy, standard business sponsorships are now granted for a period of five years as opposed to three years and 'start-up' businesses are now approved for an initial period of eighteen months as opposed to twelve.

What are the Training Benchmark requirements?

Australian businesses must establish their commitment to the training of Australians by lodging evidence of meeting either Training Benchmark A or B.

To meet Training Benchmark A the Australian business must pay the equivalent of at least 2% of payroll to an industry training fund for the training of Australian citizens or permanent residents.

To meet Training Benchmark B the Australian business must pay the equivalent of at least 1% of payroll on training Australian citizen or permanent resident employees.

Meeting the Training Benchmark is an ongoing obligation which has to be met for every 12 month period during the term of the sponsorship approval.

Overseas businesses that intend to establish business operations or fulfill a contractual obligation in Australia are exempt from meeting the Training Benchmark requirements.

How is the salary of a 457 employee determined?

The lowest acceptable salary under the 457 visa program is currently $53,900 p/a. Employers must also make a minimum contribution to a superannuation fund of the employees choice, currently 9.5% of the employees annual salary (please note that Australia does have bi-lateral superannuation agreements with some countries which allow for nationals from those countries to continue to receive super payments in their home country. In such situations employers do not require to make super payments).

Employers must pay 457 visa employees a 'market rate' salary equivalent to the rate paid to Australian employees performing a similar role.

If there are no Australian employees performing a similar role then the market rate can be determined by reference to remuneration surveys, collective agreements or awards, or job advertisements.

Employers offering a 457 employee a salary in excess of $180k p/a are exempt from market salary testing.

How do I nominate a position for a 457 visa?

The business requires to identify a position to be filled by a skilled overseas worker. The nominated occupation must be one listed in the Skilled Occupation or Consolidated Skilled Occupation List.

To lodge a valid nomination the employer must have already lodged a sponsorship application, had a previous sponsorship approved or applied for a sponsorship at the same time as the nomination application.

What is Labour Market Testing?

Labour Market Testing commenced on the 23rd November 2013 and requires sponsors to test the local labour market within a 12 month period prior to lodging a nomination application. Employers must provide information with the nomination application about attempts to recruit Australian workers.

There are exemptions from the Labour Market Testing requirement:

  • If the nominated occupation is at ANZSCO Skill Level 1 - Bachelor degree or 5 years or more relevant experience required for nominated occupation
  • If the nominated occupation is at ANZSCO Skill Level 2 - Associate degree, advanced diploma or 3 years or more relevant experience r
  • If there are obligations arising from Australian Free Trade Agreements

'Protected' occupations cannot be exempted from Labour Market Testing. 'Protected' occupations are mainly engineering and nursing positions. 

Who can apply for a subclass 457 visa?

Applications for a subclass 457 visa can be made by individuals nominated by an approved standard business sponsor for a skilled occupation on the list of eligible occupations and who meet the skill requirement for the nominated occupation.

 A 457 visa holder can bring eligible dependents with them to Australia and dependent family members are able to make a combined application. Partners accompanying the visa holder have unrestricted work rights.

Are there any English language requirements?

457 visa applicants are required to demonstrate a level of English language proficiency unless they are 'exempt'. 'Exempt' applicants include:

  • Nationals of the UK, USA, Canada, Republic of Ireland or New Zealand
  • Applicants nominated in an occupation that does not require English language for grant of registration, license or membership and has completed at least 5  years cumulative years of study in a secondary and/or higher education institution.
  • Applicants that are to be paid a salary in excess of $96,400

English language proficiency is normally established by the applicants lodging an IELTS test result with an overall test score of at least 5 with a score of at least 4.5 in each of the four test components.

Are there any health and character requirements?

A 457 visa applicant and dependent family members must be able to meet health requirements for the grant of the visa.

The Department of Immigration and Border Protection may request applicants to undergo a health examination depending on the applicants country of origin or residence, the intended period of stay or intended activities.

To be granted a 457 visa, applicants must be of good character and the Department of Immigration may request police certificates for each country that an applicant has lived in for 12 months or more in the ten year period prior to lodging the application.

How long is a 457 visa granted for?

457 visas can be granted for a period of up to four years. If a 457 visa grant is associated with a 'start-up' business sponsor that has been granted sponsorship approval for 18 months, then the 457 will normally only be granted for 18 months.