The Market Salary Requirement

On 14 September 2009, the Migration Legislation (Worker Protection) Act came into force. There are many changes which are "blog worthy", but one which is already causing some difficulty is the abolition of the minimum salary level for the 457 visa and it's replacement with the requirement to employ overseas workers on equivalent terms and conditions to those for Australian workers. One way this manifests itself is that the worker must be paid the market salary rate.

The policy behind this change is sound - it's to prevent the exploitation of overseas workers and to protect the local work force. It brings many concepts from the Fair Work Act into alignment with the Migration Act. For larger organisations where there are industrial or workplace agreements this is not a problem, but in smaller business where there is no-one else doing the job it is difficult to show what market rates are. I have pasted in below an extract from the current DIAC request for information:

"If there are no other employees in your business occupying similar positions, please provide independent evidence demonstrating that the terms and conditions of employment and base rate of pay are ones that would be provided to a local employee in an equivalent position.  This may include remuneration surveys, published earnings data or evidence of what employees are paid in similar workplaces."

It turns out that a salary survey by itself is not good enough unless the employer can show that they use the survey relied on as a guide to setting salaries. This requirement is causing some problems for some of my clients at the moment!

More details are on the DIAC website.