Temporary worker scheme changes could lock out small business

Fears are growing that reforms to the 457 visa scheme being considered by the Federal Government could make hiring overseas workers prohibitively expensive for small business.

Fears are growing that reforms to the 457 visa scheme being considered by the Federal Government could make hiring overseas workers prohibitively expensive for small business.

Under new laws proposed by Immigration Minister Chris Evans, businesses that employ overseas workers on 457 temporary work visas would face a more complicated application process, tougher penalties for rule breaches and significantly higher costs.

The new obligations that would be imposed on employers include:

• Meeting the worker’s travel costs to and from Australia.
• Income protection insurance for the worker.
• Costs associated with recruitment and migration agents incurred by the worker.
• Paying for health insurance or medical costs.
• Meeting the cost of any licences or registration required.
• Paying for the education of eligible dependent minors of the worker.

In effect, the new requirements effectively shift costs previously borne by employees or recruitment agencies on to employers, significantly increasing the cost to business of bringing workers into Australian under the 457 scheme.

According to the Australian Chamber of Commerce and Industry, if introduced the changes would mean that many small businesses would no longer be able to afford to hire temporary overseas workers.

“Employers (and especially those operating small businesses) may feel entirely discouraged from using the 457 visa which will place increasing pressure on a skilled workforce already under strain, artificially drive up wages, and ultimately reduce the ability of Australian businesses to compete globally,” the ACCI argues in its submission on the proposed changes.

Evans says the changes are needed to prevent the exploitation of foreign workers under the scheme, but the ACCI sites Government figures showing that only 1.67% of all businesses that sponsor temporary workers breached their obligations in 2006-07.

“It seems illogical to impose such burdensome new and expanded obligations on all sponsors when over 98% of sponsors are abiding by their obligations and more than 99% of temporary entrants (which is 68% comprised of 457 visa holders) never seek asylum or become unlawful,” the ACCI says.

Others are arguing that the Government’s reforms should be made even tougher. In a submission on the changes, the Construction, Forestry, Mining and Energy Union argues business should need to be approved by unions and industry groups before being allowed to sponsor workers.

And even before the new laws are passed, one business is facing a clamp down on its overseas hiring practices. Limitations may be imposed on the ability of fast-food chain McDonald’s to hire staff from overseas to manage its stores, with the Department of Immigration announcing a review of the agreement under which it brings in foreign workers.

The Australian reports today that the Government is reviewing the status of the agreement because of concerns that store manager positions being filled are not sufficiently skilled to qualify for the scheme.

“It must be stressed that the 457 program is a skilled migration scheme and is not designed for fast-food companies to employ junior workers or assistants,” a departmental spokesman told the newspaper. “Fast-food employers sponsoring an overseas store manager on a 457 visa must demonstrate a commitment to training local workers.”

Related stories:

• 457 visa approval rate jumps under Labor
• Minimum pay level jumps for 457 visa workers

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