The draft regulations outlining new sponsorship obligations for employers of subclass 457 visa holders now under study by a panel are good news and bad news to overseas Filipino workers.
The regulations are in response to the recent Deegan integrity review.
The good news is that the draft regulations outline additional protection to overseas workers by payment of a minimum salary and payment of return travel costs for visa holders and their spouses.
The minimum payment will be pegged to what Australian workers employed in similar positions.
For those who will make it to the grade, this means they will be receiving a higher compensation. Which is a bonanza.
The bad news is that this means too that overseas skilled workers would have lost their built-in cost effective advantage. They now have to compete with local labour. This means too that Australian companies will now be thinking twice before hiring workers from overseas.
Immigration minister Chris Evans said that paying them minimum wage comparable to local labor will “ensure that temporary skilled overseas workers are not employed ahead of local workers or used to undermine Australian wages and conditions.”
More bad news: The other bad news is that the draft regulations also propose to remove the requirement for employers to cover health care costs for temporary overseas workers. Instead Subclass 457 visa holders will be required to take out private health insurance at their own expense and cover any school expenses for their children.
With minimum wages being raised to the level of what Australian labour is receiving, this proposal appears economically logical.
As Minister Evans said the “principle of the Subclass 457 visa scheme is to supplement â€“ not replace â€“ the local workforce when there are serious skills shortages.”
With or without these regulations, given current economic climate however, we should really be expecting a slowdown in the hiring of skilled workers from overseas. Already there is a 31 percent drop in hiring of subclass 457 visa holders during January 2009 compared to that registered in September 2008.