Start of Financial Year Tips For Subclass 457 Sponsors

Well, its this time of year again, and there’s just two ways you can view it… You’re either suffering from the dreary drudgery of the mid year blues slump, or it’s the start of the brand new financial year, with fresh opportunities and new business resolutions.

Lets take the latter approach and start with a fresh view of approved Business Sponsors for 457 visas.

Business Sponsors need to tidy up shop in relation to several of their sponsorship obligations because failure to do so may result in fines or loss of sponsorship status and may also prevent future approvals of 457 and Employer Nomination applications.

Here are 4 action steps employers can take now to help meet your obligations:

1. Training Expenses

Sponsors approved prior to 1 July 2013 must ensure annual training expenditure is made prior to the end of the financial year. You must pay 1% of gross payroll to train your Australian employees or deposit 2% into an industry training fund.

For employers approved from 1 July 2013 onwards, the training expenditure must be made within the 12 month anniversary of sponsorship approval. The EOFY is a good time to nevertheless track YTD expenditure on training and budget for the balance to be spent in the coming financial year.

2. Temporary Skilled Migration Income Threshold (TSMIT)

The base salary threshold set on 1 July 2013 for the current financial year is $53 900. All 457 nominees must be paid at least that amount for a 38 hour week. If the salary has not been reviewed since 1 July, check the payroll figure now and top up as required.

Whether you have nominated applications to be lodged before 1 July 2014 (which are unlikely to be approved before 1 July 2014) where the market salary and annual earnings are under the likely new TSMIT of approximately $55,500 – employment offers will need to be reviewed and amended in line with the new TSMIT, as the new TSMIT will apply.

The TSMIT will rise from 1 July and 457 visa holders’ base salaries must continue to meet the new TSMIT.

3. Terms And Conditions

Apart from meeting the TSMIT criterion, employers must ensure that 457 visa holders are employed on equivalent terms and conditions – including salary – to Australian staff in the same position in the business or else at market rates. Check payroll YTD and adjust pay as necessary.

And, with the rise in the TSMIT on 1 July, it may also be necessary to adjust the salaries of any Australian employees against whom the 457 nominee’s salary is being equated.

A 457 sponsor’s obligations are not necessarily difficult to maintain but employers must be on top of those obligations and should schedule regular actions to ensure that their records reflect the keeping of those obligations.

4. Superannuation Increases

There is an increase in the Superannuation contribution from 9.25% to 9.5% effective 1 July 2014.

Transitioning to Permanent Residency

If you are in Australia on a subclass 457 visa, the two most commonly used method of obtaining permanent residency is to apply for a Employer Nomination Visa (Subclass 186) Visa under the Temporary Resident Transition Stream.

The Temporary Residence Transition Stream is right for you if you are a subclass 457 visa holder who has worked for two years in the same occupation with your nominating employer under the subclass 457 program, and your employer now wants to offer you a permanent position in that same occupation.

The eligibility criteria are that you must:

hold a Subclass 457 Visa;
have worked for at least 2 of the last 3 years in the same position your employer nominated you for while you held your subclass 457 visa;
have been nominated by your employer for a permanent position and the nomination must have been approved within the last 6 months;
be under 50 at the time of application (unless you are exempt);
have the required skills and qualifications for the position (you must hold any mandatory registration, license or professional membership, or you must already be fully assessed as suitable by the relevant body);
have at least vocational English (score of at least 5 on all four components of IELTS or a score of B on all four components of the OET test) – there is an exemption to the English language requirement for passport holders from the UK, US, Canada, New Zealand and Ireland); and
meet health and character requirements.

Contact us for a Free Consultation

At GMH Legal, our lawyers go over and above to give you the best advice as quickly as possible. Whether its quick information over the phone for a question that’s been on your mind for while, or general information about visa’s in general, we’re happy to help. Our contact details are:

Tel: (02) 9587 0458
Email: solicitors@gmhlegal.com