Minimum salary for sponsored workers increases from 1 July 2023

Being raised for the first time since 2013, from 1 July 2023, the Australian Government will increase the Temporary Skilled Migration Income Threshold (TSMIT) from $53,900 to $70,000.

What is the TSMIT and why is it relevant for the Hospitality industry?

The Hospitality industry has been steadily recovering from the COVID-19 pandemic, with growth attributed to factors such as a growing ‘foodie’ culture and an increase in consumer demand. This growth has resulted in a shortage of suitably trained staff. The devastating effects of the COVID-19 pandemic further contributed to worsening the skills shortages within the industry, as skilled migrants on temporary visas departed Australia.

In fact, the accommodation and food services industry is at the top of the list of work visa applications granted (as at 31 March 2023). Chefs, cooks, and restaurant managers are within the most common occupations to be sponsored on visas.

Due to the growing skills shortages, businesses need to consider employing overseas workers and adopting visa solutions to fill their vacancies.

Employers who wish to sponsor skilled migrants must meet certain salary and employment conditions requirements. The TSMIT is the minimum annualised salary (excl. Superannuation) that a skilled migrant must be paid under the applicable visa subclass. Moreover, the proposed salary must be within the Australian labour market rate for the position.

How do the upcoming changes to the TSMIT affect employers?

In short, employers looking to sponsor visa workers on the Temporary Skill Shortage Visa (Subclass 482) will be required to pay skilled migrants a salary of at least $70,000 (excl. Superannuation).  

When sponsoring overseas skilled workers, Australian businesses must offer a salary equal or above the TSMIT, and that salary must also be within the market rate for the role. The rationale being this is that overseas workers should not be paid less than an Australian worker doing the same work in the same location. This requirement ensures that visa programs are utilised appropriately, and not used to undermine the workers within the Australian labour market who may be suitable to fill job vacancies. The market salary rate is determined by looking at what a business would pay equivalent Australian workers, enterprise agreements or industrial awards, Job Outlook information, advertisements for the last 6 months in the same location, remuneration survey or advice from unions or employer associations.

Furthermore, employers seeking to sponsor an overseas worker must show that they cannot find a suitable Australian worker. This is known as the Labour Market Testing (LMT) requirement, and it means that they will need to test the local labour market before nominating a worker. The LMT requirement generally involves advertising the position in Australia for a specified period.

The upcoming changes to the TSMIT will commence from 1 July 2023, which means there are important time constraints to be taken into consideration prior to submitting any nomination or visa application.

Why is it important to seek advice?

If your business sponsors visa workers or if you are experiencing difficulty with filling vacancies within your business, then we encourage you to seek professional advice to discuss the best visa options to optimise the results for your business and your employees.

We are committed to assisting your business through navigating the changes to migration law, so please reach out if you require advice on the upcoming changes

“The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.”
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