Pros and cons of a 457 visa


There are some surprising upsides to the red tape involved in the 457 process.

The media continues to canvass measures to counteract the decline in the skilled workforce as baby boomers retire. One strategy is the introduction of skilled employees from overseas.

An important component of skilled migration to Australia is the Temporary Standard Business Subclass 457 visa scheme. This visa has attracted special attention from the federal government over the years and now there is a call for a crackdown by the Gillard government to strengthen the scheme against alleged abuse by some employers.

The potential for such abuse appears to be two-fold: the under-utilisation of potential local applicants for jobs; and under-payment of the 457 visa-holders. The debate centred on two questions. Do we need overseas employees? And can we trust Australian managers to adequately pay and manage them?

According to 1044 AHRI members, who responded to a Pulse survey in 2008, eight out of 10 believe a skilled migration scheme is necessary, and seven out of 10 reported that their organisations experienced skill shortages.

Data confirmed issues around minimum salary levels, labour agreements and English language requirements. While occupational health and safety, integrity and exploitation of 457 visa-holders were not identified by these HR practitioners to be of particular concern. Retention issues and assimilation of overseas employees into organisations were frequently brought up as challenges.

The contentious three-stage 457 visa application

  1. The first stage involves the sponsorship application for the employing organisation, with a requirement to show documentation of the organisation lawfully operating a business.
  2. The second stage covers nomination and requires a job description, supported by an employment contract (including compensation and benefits for service), offer of employment, and copies an of award or enterprise agreement. Also required are copies of comparative employment contracts and payslips for Australian employees undertaking the same role.
  3. The third stage involves the application by the 457 visa employee, requiring assessment of qualifications and experience, and verification of registrations, licensing, professional memberships and English language competence.

The documentary process was described as arduous by many interviewees. However, while the number of questions an organisation is required to answer has increased over the years, the information required to answer them should be available in HR records.

The advantage of pursuing a 457 visa

There are numerous advantages, which are increasing. The scheme now enjoys a faster processing time (four to 12 weeks) than other employer-sponsored visas.

The scheme also heightens the need for well-developed diversity management policies and socialisation programs to integrate the visa-holder. If the recruitment, selection and socialisation strategies are successful, the organisation can sponsor the 457 visa-holder for permanent residency after two years, which is a positive incentive for retention.

So what are the disadvantages?

After obtaining the visa, the visa-holder can leave if they find another organisation to sponsor them within 28 days. After all the perceived red tape, to have the prize applicant leave can be disheartening. As stated by one interviewee, “my company bore the cost but did not really reap the benefit”. Further, if the 457 visa-holder absconds within Australia, and becomes illegal, there is the added irritation of having to financially pay for them to leave Australia.

Another disadvantage can be disappointment at the level of performance by the visa-holder. It is one thing to terminate employment on the grounds of non-performance; it is quite another situation when doing so will result in the person losing their job and right to remain in Australia. Performance management is never easy when dealing with the non-performer; it is perhaps an added incentive when managing the 457 visa-holder to do it well.

Auditing for compliance with sponsorship obligations by the Department of Immigration and Citizenship (DIAC) was also identified as ‘gruelling’. DIAC has far-reaching powers in terms of right of entry into the workplace, and imposed sanctions if breaches occur. However, prosecutions and sanctions imposed by DIAC are against those organisations that grossly mistreat their 457 visa-holders. The organisation that strives for good, or best practice in their management is unlikely to incur prosecution by DIAC.

Similar to the management of taxation, the strength of evidence lies in the documentation.

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Pros and cons of a 457 visa


There are some surprising upsides to the red tape involved in the 457 process.

The media continues to canvass measures to counteract the decline in the skilled workforce as baby boomers retire. One strategy is the introduction of skilled employees from overseas.

An important component of skilled migration to Australia is the Temporary Standard Business Subclass 457 visa scheme. This visa has attracted special attention from the federal government over the years and now there is a call for a crackdown by the Gillard government to strengthen the scheme against alleged abuse by some employers.

The potential for such abuse appears to be two-fold: the under-utilisation of potential local applicants for jobs; and under-payment of the 457 visa-holders. The debate centred on two questions. Do we need overseas employees? And can we trust Australian managers to adequately pay and manage them?

According to 1044 AHRI members, who responded to a Pulse survey in 2008, eight out of 10 believe a skilled migration scheme is necessary, and seven out of 10 reported that their organisations experienced skill shortages.

Data confirmed issues around minimum salary levels, labour agreements and English language requirements. While occupational health and safety, integrity and exploitation of 457 visa-holders were not identified by these HR practitioners to be of particular concern. Retention issues and assimilation of overseas employees into organisations were frequently brought up as challenges.

The contentious three-stage 457 visa application

  1. The first stage involves the sponsorship application for the employing organisation, with a requirement to show documentation of the organisation lawfully operating a business.
  2. The second stage covers nomination and requires a job description, supported by an employment contract (including compensation and benefits for service), offer of employment, and copies an of award or enterprise agreement. Also required are copies of comparative employment contracts and payslips for Australian employees undertaking the same role.
  3. The third stage involves the application by the 457 visa employee, requiring assessment of qualifications and experience, and verification of registrations, licensing, professional memberships and English language competence.

The documentary process was described as arduous by many interviewees. However, while the number of questions an organisation is required to answer has increased over the years, the information required to answer them should be available in HR records.

The advantage of pursuing a 457 visa

There are numerous advantages, which are increasing. The scheme now enjoys a faster processing time (four to 12 weeks) than other employer-sponsored visas.

The scheme also heightens the need for well-developed diversity management policies and socialisation programs to integrate the visa-holder. If the recruitment, selection and socialisation strategies are successful, the organisation can sponsor the 457 visa-holder for permanent residency after two years, which is a positive incentive for retention.

So what are the disadvantages?

After obtaining the visa, the visa-holder can leave if they find another organisation to sponsor them within 28 days. After all the perceived red tape, to have the prize applicant leave can be disheartening. As stated by one interviewee, “my company bore the cost but did not really reap the benefit”. Further, if the 457 visa-holder absconds within Australia, and becomes illegal, there is the added irritation of having to financially pay for them to leave Australia.

Another disadvantage can be disappointment at the level of performance by the visa-holder. It is one thing to terminate employment on the grounds of non-performance; it is quite another situation when doing so will result in the person losing their job and right to remain in Australia. Performance management is never easy when dealing with the non-performer; it is perhaps an added incentive when managing the 457 visa-holder to do it well.

Auditing for compliance with sponsorship obligations by the Department of Immigration and Citizenship (DIAC) was also identified as ‘gruelling’. DIAC has far-reaching powers in terms of right of entry into the workplace, and imposed sanctions if breaches occur. However, prosecutions and sanctions imposed by DIAC are against those organisations that grossly mistreat their 457 visa-holders. The organisation that strives for good, or best practice in their management is unlikely to incur prosecution by DIAC.

Similar to the management of taxation, the strength of evidence lies in the documentation.

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