Australia’s 457 visa: some obligations and requirements for employer sponsors and visa applicants

Australia has a popular temporary skilled work visa program known as the Subclass 457 visa. The 457 visa can fill labour shortages for Australia’s employers and can act as a first step towards Australian permanent residency for visa applicants. Since 2013, sponsor obligations for 457 Standard Business Sponsors, and requirements for nominations and visa applicants have been toughened up. That year, a number of measures were introduced and continue to today:

  • Making the training benchmark obligation an on-going and enforceable requirement throughout the life of the sponsorship and beyond: Sponsors must maintain records to show they are meeting the training benchmark requirements.
  • Demonstrating a genuine skill need: A case officer considering a 457 nomination application  must be satisfied that the nominated position is genuine and may refuse the application if:

o   The tasks of the nominated occupation do not correspond with the tasks of an eligible occupation; or

o   The position associated with the nominated occupation is not genuine.

  • Indicating how many workers an employer will sponsor: Employers are restricted to sponsoring the number of 457 workers that was approved in their sponsorship application. The sponsor can apply to DIBP to vary this number. A sponsorship agreement will cease when the number of nominations is reached, or the time period expires (1, 3, or 6 years) – whichever occurs first. (But note that “Accredited” sponsors will not be required to nominate the number of workers they intend to sponsor).
  • Skills assessment for generalist occupations: The assessment of some generalist occupations was strengthened.
  • Market salary rate assessment expanded to regional locality: Market salary rate provisions were expanded to apply beyond the particular workplace to that workplace’s regional locality. Where there is no equivalent Australian worker, in the particular workplace, the employer must satisfy DIBP that the terms and conditions of employment are appropriate for that location and industry by reference to external factors.
  • Market salary rate exemption lifted to $250,000: The market salary assessment exemption threshold was increased to $250,000.
  • Employment must consist of a direct employee-employer relationship: Employees must be employed by their sponsor in a direct employee-employer relationship. This prohibits on-hire arrangements that fall outside approved Labour Agreements and prevents sponsors from engaging visa holders under arrangements that resemble independent contracting arrangements. Sponsors must keep a record of written contracts of employment with primary sponsored persons.
  • Sponsors are obligated to pay certain costs: Sponsors are required to pay certain costs associated with becoming a sponsor and not pass on these costs, in any form, to a sponsored person.
  • English language requirement must be met when new nomination is lodged: If a 457 visa holder who was previously exempt from the English language requirement because their annual earnings were above the specified threshold, is re-nominated at a salary level lower than the ELSET (English Language Salary Exemption Threshold), the visa holder must demonstrate that they either meet the English language requirement or that they are otherwise exempt.
  • Occupation based exemptions to the English language requirement were removed:  Other exemptions remain unchanged including:

o   a nominated salary that is over ELSET;

o   a passport from Canada, USA, UK, Republic of Ireland and New Zealand; or

o   have completed at least 5 consecutive years of full time study in a secondary and/or higher education institution where the instruction was in English.

  • Definition of English language is aligned with the Employer Nomination Scheme: Occupational English Test score of ‘B’ in each of the four test components will now also be accepted, and the IELTS or OET must have been completed within 3 years prior to the date an application is lodged.
  • Restricted terms of sponsorship for start-up businesses: The term of sponsorship approval for start-up businesses is limited to an initial 12 months and all 457 visa holders sponsored by start-up businesses are limited to an initial 12 month visa.
  • Mandatory electronic lodgement: All subclass 457 sponsorship, nomination, and visa applications must be lodged using the online facility.
  • Requiring visa holders to begin work within 90 days of arriving in Australia: It is now part of condition 8107 that a subclass 457 visa holder must commence work with their sponsor within 90 days of arriving in Australia.
  • Requiring mandatory registration, licensing or membership: Subclass 457 visa holders must seek to obtain, within 28 days, any mandatory registration, licence or membership for their occupation in the state or territory they are employed.
  • The time period for 457 visa holders to find a new sponsor or to depart Australia, if they cease employment with their sponsoring employer, is  90 consecutive days.
  • The Migration Act requires the Minister to take all reasonable steps to ensure that certain sponsorship obligations are prescribed by the Migration Regulations.
  • Enforceable undertakings will be an additional enforcement option where there has been a previous failure by a sponsor or former sponsor to satisfy a sponsorship obligation.
  • Fair Work Inspectors are Inspectors under the Migration Act and exercise of powers for Migration Act purposes: The Government’s capacity to monitor and investigate compliance enable Fair Work Inspectors to exercise powers for the purposes of the Migration Act. Fair Work Inspectors investigate compliance with sponsorship obligations to ensure workers are working in their nominated occupation and being paid market salary rates.

Pablo Ramirez Migration Agent Registration Number 1276842

Legal Practitioner NSW 61021


Michele Clayton Migration Agent Registration Number 0957773

Legal Practitioner NSW 55486

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