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The market rate requirement for Subclass 457 visa holders
The market rate requirement and endorsement
To be endorsed to access the Northern Territory Designated Area Migration Agreement (NT DAMA) you have to show that the overseas worker you are sponsoring will be paid at least the local market rate for the occupation to which they are to be sponsored.
You must demonstrate that the terms and conditions of employment you are offering your overseas worker will be no less than those that you would provide to an equivalently skilled and experienced Australian worker performing the same work at the same location.
The proposed terms and conditions must also reflect the market rate for the occupation in the region.
The only time the market rate does not apply is when the proposed guaranteed annual earnings of the overseas worker will be at least exemption salary rate set by the Australian Government, which is $250,000 per year.
Terms and conditions of employment
Terms and conditions are considered to be less favourable if the overseas worker’s guaranteed annual earnings are less than those of a comparable Australian worker.
Guaranteed annual earnings include:
- guaranteed allowances such as accommodation or food allowances
- agreed reasonable monetary value of non-monetary benefits such as a motor vehicle to which the employee is entitled in return for the performance of work.
Guaranteed annual earnings don’t include the following:
- payments or amounts that can’t be determined in advance such as overtime, performance based commissions or bonuses
- reimbursements paid to the employee
- compulsory superannuation payments.
Evidence of terms and conditions
The type of evidence needed depends on whether you already employ an Australian citizen or permanent resident (an Australian) in the same role in the same location.
If you do employ a comparable Australian in the same role in the same location then you should provide:
- the Australian worker’s payslip or employment contract with identifying details removed
- a comparison of the duties, number of hours worked and level of experience of the Australian and the overseas workers to show that the salary and other terms are comparable.
If your business does not employ a comparable Australian then you need to explain how you determined the overseas worker’s proposed guaranteed annual earnings. You have to supply:
- the relevant industrial agreement, enterprise agreement or award
- information from employer associations or unions
- ABS statistics
- Australian Government Job Outlook data
- remuneration surveys
- job vacancy advertisements.
Unless the Subclass 457 visa holder’s country of citizenship has reciprocal arrangements with Australia they are not eligible for government support like Medicare and the Pharmaceutical Benefits Scheme.
Subclass 457 visa holders must maintain private health insurance when in Australia. This is also required of any family members included on their visa who are living in Australia.
You should take this into consideration if you are applying to the Northern Territory Government for a salary concession.
It is mandatory that when you have signed the labour agreement with the Department of Home Affairs that you continue to pay your overseas workers market rates.
This may mean that the Subclass 457 visas holder’s salary will need to be reviewed and increased in line with changes to the market rate.
Your sponsorship obligations are ongoing. Serious penalties and administrative sanctions will apply if your business has breached any obligations in relation the Subclass 457 visa holders it employs.