Senate motion raises market-rate salary exemption back to A$250 000

IMPACT – MEDIUM

What is the change? A disallowance motion in the Senate has reversed a recent rule that lowered the market-rate salary exemption from A$250 000 to A$180 000 for 457 visa holders. The exemption threshold will revert back to A$250 000.

What does the change mean? Foreign employees must earn at least A$250 000 for employers to be exempt from salary-equivalency rules. For employees making less than the exemption threshold of A$250 000, employers must prove they are earning the same as their Australian counterparts.

• Implementation time frame: Immediate.
• Visas/permits affected: Subclass 457 visas.
• Who is affected: Companies sponsoring skilled foreign employees in the subclass 457 program.
• Business impact: The change will increase the evidentiary burden on employers, for certain primary visa applicants they wish to nominate for a subclass 457 visa.

Background: Employers must show evidence that they are paying the market rate to 457 visa holders, but are exempt if the worker’s base salary reaches a threshold set by the Government.

In April, the exemption threshold was lowered significantly to A$180 000, allowing more employers to benefit from the exemption.

BAL Analysis: The return to the higher exemption threshold means employers will not qualify as often for the exemption from market-rate salary assessments.

This alert has been provided by BAL Australia. For additional information, please contact australia@bal.com.

MARN: 9683856

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