Overtime, wages & allowances can be part of the TSMIT

By Lorenzo Boccabella, Barrister-at-law and specialist in migration law

 

No where do the regulations prohibit overtime, penalties and allowances being part of the wages and salary to make up the TISMIT. Hence the calculation of the TISMIT salary is not restricted to ordinary times earnings.

Regs 2.72(15), (16) and (17) the basic requirements are that the employee’s earnings are least the  “annual market salary rate”, and must be at least the “temporary skilled migration income threshold” (the TSMIT) which for all nominations lodged after 1 July 2023 must be $70,000 per annum.

Reg 1.03 contains this definition:

“annual market salary rate (AMSR), for a proposed occupation nominated under section 140GB of the Act or an occupation in relation to which a position is nominated under regulation 5.19, means the earnings an Australian citizen or an Australian permanent resident earns or would earn for performing equivalent work on a full-time basis for a year in the same workplace at the same location.

The legislative instrument, Migration (IMMI 18/033: Specification of Income Threshold and Annual Earnings and Methodology of Annual Market Salary Rate) Instrument 2018 states that if there is a fair work instrument applying to the occupation or the workplace the  “annual market salary rate”, ‘is the annual earnings of an Australian worker contained in those instruments”.

 

Again there is no reference to, overtime penalty rates or any allowances. What is ultimately means is that the TSMIT is not restricted to the 38 hour week.

The Fair Work Ombudsman states the following:

“Employers can only request or require employees to work more than their maximum weekly hours where the additional hours are reasonable. Employees can refuse to work overtime that unreasonably exceeds the maximum weekly hours.”

The corollary is that if an employee agrees his or her annual earnings can contain a reasonable overtime component, there is no reason why a 48 hour week including 10 hours overtime in every week would be unreasonable. Of course overtime must be paid at penalty rates.

There are many enterprise agreements which contain either a monthly or fortnightly spread of hours which include a regular Saturday or Sunday work.

Where there is no fair work instrument and there are no Australian workers performing the same work at that workplace then Immi18/033 requires that the employee be paid “the annual market salary is the annual earnings that would apply to an equivalent Australian worker, which must be determined by reference to relevant information.”

In Immi18/033, ‘relevant information’ includes:

“(b) job advertisements from a national recruitment website or national print media that are in English and specify the salary arrangements for the advertised position;”

Job advertisements can define that would be paid for a 38 hour week, but the ‘annual earnings’ could still include an overtime component to guarantee that $70,000 would be paid to the nominated employee even though the nomination 38 hour earnings would be less than $70000.

What is required by the TSMIT in the regulations is that the employee’s annual earning must not be less than $70,000. A typical employment contract should therefore contain the following clause.

“The employee agrees to undertake all reasonable overtime or weekend work requested by the employer and consequentially that employer guarantees the employee’s annual earnings, in total, will be at least $70,000 per annum (excluding superannuation paid at the statutory rate on ordinary time earnings).

The employee and the employer agree that  the overtime hours to be worked to make up annual earning of $70,000 is reasonable.”  

It follows from the above that lower paid occupations can still be subject of a nomination, particularly on the regional occupations list for subclass 482 visas as long as guaranteed overtime or penalty rates brings the annual earnings up to $70,000 per annum. It also needs to be noted that statutory superannuation is only paid on ordinary times earnings (usually excluding overtime).

The TSMIT therefore can include overtime and penalty rates pay as long as the contract guarantees annual earnings of $70,000.

Also attached is Immi18/033.

 

Allegra Boccabella