Recruitment & Hiring

Labor announces crackdown on businesses employing foreign workers, hiking costs more than 50%

Dominic Powell /

workers

Leader of the Opposition Bill Shorten. Source: AAP Image/Mick Tsikas.

Labor has announced a crackdown on businesses employing international workers will be on the cards if it forms government on May 18, with new rules for visa subclasses which are likely to affect many Australian SMEs.

Announced yesterday by Shadow Employment Minister Brendan O’Connor, the new changes would see the Temporary Skilled Migration Income Threshold (TSMIT) immediately raised to $65,000, an increase of 20% from the previous threshold of $53,900.

This would mean any business employing a foreign worker would be required to pay them $65,000 at minimum, an increase industry leaders believe will increase costs for small-business owners seeking to fill skill shortages. These changes would affect visa subclasses 482, 186 and 187.

Additionally, Labor would also see an increase in the levies paid by businesses who are seeking to sponsor a worker on a Temporary Skills Shortage visa to reflect a percentage of the TSMIT, locking it in at either 3% or 6% depending on the business’ revenue.

For SMEs with $10 million or less turnover, the levy would be set at 3%, equalling $1,950 a year for four years, or $7,800. For businesses with greater than $10 million in revenue, the levy would be set at 6%, costing $15,600 over four years.

This is a significant increase from the current levy prices, which sees businesses with $10 million or under pay just $4,800 over four years, and larger businesses pay $7,200.

Opposition Leader Bill Shorten has sold the policy as a method to make sure Australian workers aren’t being “undercut” by cheaper foreign workers, saying in a statement with O’Connor that Liberal policy is leaving Australian workers at “the back of the queue”.

“[This policy will] crackdown on the exploitation of overseas workers which undermine local wages and conditions, and make sure businesses must prove they have looked to employ local workers first,” O’Connor said in a statement.

“These reforms improve fairness, equity, level the playing field for Australian workers, and protect jobs and wages.”

Labor’s proposed policy would also close “loopholes” which allow business owners to artificially increase salaries in order to meet the threshold, including “inflated or excessive” overtime hours.

Additionally, an independent body would be set up to oversee the issuing of Temporary Skills Shortage visas, and restrict them to industries where there are “genuine skill shortages”.

Businesses would also be required to contribute to a public register of each visa-holding worker on their books, and the Fair Work Ombudsman would be provided with the power to inspect and prosecute employer breaches of Migration Act which relate to visa conditions.

“We will also improve cooperation between the Fair Work Ombudsman and the Department of Home Affairs so that migrant workers — like those exploited by unscrupulous franchises — can come forward to expose exploitation without fear of immediate deportation,” O’Connor said.

NOW READ: Labor’s “fair go” plan: The policies Bill Shorten hopes will woo voters and how they affect small business

NOW READ: Labor looks to lock in minimum ‘living wage’ hike as momentum builds for Fair Work changes

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Dominic Powell

Dominic is the former features and profiles editor at SmartCompany.

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