Review announced into the 457 program and nomination ceiling removed

The Federal Government recently announced a review of the 457 program which is expected to focus on the provisions introduced in July last year by the Migration Amendment (Temporary Sponsored Visas) Act 2013. The review was announced by Assistant Immigration Minister Michaelia Cash, who indicated that the terms of reference will include efforts to remove “unnecessary administrative burdens on business”, and “maintain the integrity” of the 457 program. The review panel is scheduled to report back to the government in mid-2014.

Nomination ceiling removed

Meanwhile, on 14 February 2014 the Department of Immigration and Border Protection (DIBP) removed the “nomination ceiling” requirement for new sponsors. This provision was introduced in July 2013, requiring businesses seeking Standard Business Sponsorship (SBS) approval to indicate how many positions they expected to nominate over the term of the sponsorship. This figure needed to be assessed as “reasonable” by DIBP, and if the nomination ceiling was reached before the normal three year expiry of the SBS, businesses would be forced to reapply for sponsorship approval.

With this latest change, sponsors can once again lodge an unlimited number of nominations over the three year approval of the sponsorship. Applicants for sponsorship approval or renewal will still be required to estimate the number of nominations they intend to make, however this figure will not have any impact on the expiry of the sponsorship.  Accordingly, even where a sponsor exceeds their estimated number of nominations, their sponsorship approval will continue until the stated expiry date.

Importantly, businesses whose SBS was approved between 1 July 2013 and 14 February 2014 will still be subject to the nomination ceiling. These sponsorships will continue to cease when the maximum number of nominations approved by DIBP has been reached, although businesses may apply to DIBP to vary the terms of their existing sponsorship. In practice, a sponsorship variation application will require similar information to any new sponsorship application.

What does this mean for businesses?

The removal of the nomination ceiling is a welcome relaxation of the 457 requirements for sponsors. Capping the number of nominations unnecessarily constrained a business’ ability to manage their workforce, while potentially requiring businesses to reapply for sponsorship approval more frequently. Along with the review into the 457 program that was announced by the government recently, the removal of the nomination ceiling potentially foreshadows further reforms ahead for employer sponsored visas.

Clients with questions or concerns about how these changes may impact their business are encouraged to contact Hall & Wilcox.