Visa 457: more data please DIMA

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The Department of Immigration and Multicultural Affairs (DIMA) seems to have adopted the gist of at least one recommendation from ‘Fixing the 457 visa for temporary foreign workers’, published in the New Matilda Policy Portal last month.

According to a media report, DIMA is now proposing that the Australian Taxation Office be authorised to match payroll data in the tax returns of 457 employers with DIMA data on the wages that 457 visa-holders are supposed to be paid (‘Making 457-visa bosses pay up’, Australian Financial Review, 22 September 2006). This will mean changes to taxation legislation.

This is known as “data-matching”, and was the second of seven recommendations for fixing 457s in the 8 September article in New Matilda.
This will enable DIMA to verify whether employers are actually paying 457 visa-holders the minimum wage rate mandated by DIMA when the 457 visas were approved, i.e. the award rate or the 457 minimum salary level (MSL), whichever is the higher.

The current 457 MSL is an annual base salary of just under $42,000 for most occupations and $57,300 in some ICT occupations. Both the award rate and the MSL are below market rates for many skilled occupations in which 457 visas are granted.

According to the Financial Review story, DIMA is proposing the ATO be authorized to notify DIMA of 457 employers who “underpaid” 457 visa-holders by failing to pay them the higher of the relevant award (collective agreement) rate or the MSL.

DIMA support for this data-matching by the ATO is effectively an admission of shortcomings in its current system for monitoring employer compliance with the wages regulations in the 457 visa program. For 75% of the 10,000 employers of 457s in 2005-06, DIMA relies solely on a paper-based checking system

It does appear from the 22 September Financial Review story that the data-matching exercise will be limited to determining only if 457 visa-holders have been paid the DIMA-approved minimum, i.e. the higher of the award rate or the MSL.

It is not clear whether the 457 wages data-matching will disclose the actual dollar wages that 457 visa-holders have been paid.

But this information on actual wages is essential to determining whether or not 457 visa-holders are paid below market rates and therefore whether the 457 visa program is undermining Australian rates and conditions. This data needs to be disclosed, through some means or other.

A Task Force of officials from Commonwealth and State/Territory governments is reviewing the 457 visa program from top to bottom and is expected to report to the Council of Australian Governments) COAG in December 2006.

The Task Force will need to address this vital issue of how to obtain and publish data on wages actually paid to 457 visa-holders by occupation and locality, and then compare actual 457 wages to relevant market rates.

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