Market Salary Rates & Equivalent Worker Requirements for Subclass 457 Visa

As part of the subclass 457 visa programme, the Australian government introduced the ‘equivalent worker’ and ‘market salary rate’ provisions to ensure that the programme can continue to provide various industries with the required skills while not undermining the Australian labour market, exploiting international worker’s or employment opportunities for Australians.

In short, the market salary rates and equivalent worker provisions ensure that the 457 visa holder will be provided with the same terms and conditions of employment (working hours, salary, overtime, penalty rates etc) that would be provided to an equivalent Australian worker.

If an equivalent Australian citizen, or Permanent Resident exists in the business

For sponsor’s that are nominating a position that already exists in the business, the minimum market salary rate must be no less than apply to that same equivalent worker furthermore, the conditions may not be any less favourable.

For example, if John, an Australian citizen and is working for a business as an Architect on the basis of a 38 hour work week, on a salary of  $70,000 plus superannuation contribution of 9.5% the business must provide the overseas worker with the equivalent or higher terms and conditions of employment.

If there is no Australian citizen or Permanent Resident performing the equivalent role in the business

In various cases, businesses require the skills of an overseas worker to undertake a role that is not being performed in the business. In these cases the business must satisfy the Department that the terms and conditions of employment are at, or above the conditions set out in the relevant industrial agreement, award or collective agreement.

If an industrial agreement, award or collective agreement does not exist

In the event a business is nominating a position that is not covered by an industrial agreement, award or collective agreement the business must provide evidence to substantiate the terms and conditions (in particular the salary) of the position are in line with the market salary rate.

The Temporary Skilled Migration Income Threshold (TSMIT)

As of the date of this article, the current Temporary Skilled Migration Income Threshold (TSMIT) is set at $53,900 which means that if a business is intending on sponsoring an overseas employee the market salary rate of the position must be above $53,900.

In the event the salary is ‘inflated’ to meet the TSMIT, unless the market salary rate for that occupation or position is above the TSMIT, the nomination will be refused by the Department.

There is also an ‘upper salary threshold’ of $180,000 for the requirement to provide evidence of market salary rates. In the event the position that is being nominated will be receiving guaranteed annual earnings in excess or equal to $180,000 the requirement to provide evidence of market salary rates is not necessary.