Managing 457 visa holders during economic downturns

The challenging economic environment is still pressuring many Australian businesses. How can you retain your foreign workers during temporary slumps?

Managing 457 visa holders during economic downturns

Losing skilled talent from overseas is a painful prospect that many organisations may now be facing. After putting great effort into finding and recruiting top overseas talent, delayed or cancelled projects can result in being unable to provide full-time employment to all.

This can prove problematic for both employee and employer, and possibly interfere with sponsorship.

“This presents some confusion as employers are aware of their obligations as sponsors to provide ongoing, full-time employment and pay the market rate salary to their 457 visa holders,” Peter Snell, solicitor at Stirling Henry Global Migration, said.

However, Snell added that there are a number of solutions available to retain 457 visa holders and still satisfy obligations as a sponsor and an employer. He outlined the following:

  • Leave without pay. Periods of up to 12 months of leave without pay may be available in certain circumstances. This right to unpaid leave must, however, be available to all employees.
  • Temporary “lay-off”. These periods require prior approval of the Department of Immigration, and must be short-term only. They also must be due to seasonal downturn.
  • Absence from Australia. This is permitted for limited periods, and the employer must demonstrate that the employment in Australia is genuine. The visa holder must demonstrate they have a ‘continuing and genuine intention’ to perform the work for which their visa was approved.
  • Reduced hours. A pro-rata reduction in salary may be offered to the visa holder with reduced hours. Consideration must be given to the requirement to pay at least the Temporary Skilled Migration Income Threshold (TSMIT) – which currently sits at $53,900.
  • Holiday leave. Used strategically (and with the consent of the visa holder), holiday leave can allow flexibility in hours of work without breaching sponsorship obligations. The visa holder is entitled to payment of their salary during holiday leave.t terminated may also be available in circumstances where the re-employment occurs within 90 days of termination.

“We recommend that if you are an employer in a position where you may need to reduce the hours of work for your subclass 457 visa holders, you seek professional advice to develop a strategy that is specific to your business needs,” Snell added.


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