The Lowdown on Employer Sponsored Visa Reform

Many will be aware that the 457 visa programme is now closed to new applications after being formally ‘abolished’ on Sunday 18 March 2018.

 

It has been replaced by the Subclass 482 Temporary Skilled Shortage visa programme (TSS), which – by and large – is a rebranded and remodelled version of its predecessor.  In companion legislation, consequential changes to the employer-sponsored Permanent Residence framework have also come into effect.

 

The changes have taken effect incrementally since the surprise announcements on 18 April last year, and almost all most of the reform agenda (save for implementation of the ‘Skilling Australia Fund levy’) is in effect at the time of writing.

 

Temporary Work Visa Changes At-a-Glance

 

  1. TSS visa validity periods are determined by the occupation, and the length of time the sponsor wishes to employ them.
  2. Occupations included on the Short-term Skilled Occupation List (STSOL) allow a maximum stay of two years (with only one onshore renewal) – subject to any shorter period requested by the nominator
  3. Occupations included on the Medium and Long Term Skills Shortage List (MLTSSL) allow a stay of up to four years, with a pathway to permanent residence after three years, but this is also subject to any shorter period requested by the nominator. Occupations on the “Regional Occupation List” (ROL) are treated the same as an MLTSSL occupation, but are only available in gazetted regional areas.
  4. Subject to the introduction of the Skilling Australia Fund levy (SAF), sponsors will need to contribute an upfront payment of between $1,200 and $1,800 for each year they wish to sponsor a visa holder (the difference being dependent on whether the business has less or more than $10 million turnover respectively). For MLTSSL occupations, this will add $7,200 to the cost of a 4 year visa, a cost which is non-transferable by the sponsor. The levy is not refundable if the visa application is refused (unless on a health or character basis), and nor is the levy refundable in the event that the sponsored person moves to another employer (which around 20% of 457 visa holders typically do). The levy is also payable in the hands of the inbound sponsor as part of a transfer.
  5. Visa Application charges will increase as follows:
TSS Visa Application Charges Primary Applicant Adult Secondary Child Secondary
STSOL $1,150 $1,150 $290
MLTSSL and ROL $2,400 $2,400 $600

 

  1. Labour Market Testing is now mandatory in all cases unless an international treaty obligation applies (e.g. the China, Korea, Free Trade Agreements, or between WTO signatories amongst others). LMT is highly prescriptive and requires a sponsor to:

Publish at least two English language advertisements for 21 consecutive days, in an Australian national paper or radio, which includes the title (or a description of the position), the name of the sponsor or recruitment agency being used by the sponsor, and the annual earnings for the position.

  1. The primary visa applicant must have at least two years of full time work equivalent work experience relevant to the nominated occupation. This will rule out most graduates and many working holiday makers.
  2. Nominated positions must now be full-time.
  3. A new visa condition (Condition 8607) will mean that a primary 482 visa holder who changes their occupation (whether with a new employer or the same employer), will need to apply for a new 482 visa before they can commence in the new role. A new nomination (and presumably SAF levy) will also apply in this situation.
  4. A comprehensive ‘Genuine Intention to take up a Genuine Role’ test will apply at visa stage, as will a separate “Genuine Temporary Entrant’ requirement for STSOL occupations
  5. Greater focus on compliance with Australia’s workplace law framework

 

The above rules are in addition to a tightening of English requirements, assessment of skills, as well as an assessment of the sponsor’s previous conduct, which are among other changes that have made the process far more onerous than any iteration of the temporary work visa programme before it.

 

Employer Sponsored Visa Changes: At-a-glance

 

The introduction of the new TSS visa framework has implications for the Employer Nomination Scheme (ENS) and Regional Sponsored Migration Scheme (RSMS). In short, the changes are as follows:

 

  1. Those who held a subclass 457 visa on 18 April 2017 will have their pathway to employer sponsored migration preserved under the old ENS and RSMS rules (until March 2022).
  2. All other applicants will be subject to the new requirements that apply including:
  • Age limit of 45 unless exempted by occupation, or paid higher than the Fair Work High Income Threshold for at least three years whilst holding a subclass 457/482 visa
  • Nominated occupation must be on the gazetted (MLTSSL) list at the time of application
  • A three year qualifying period on a 457/482 visa is now required before transitioning to permanent residence (up from two years)
  • The requirement for the market salary rate to be above the Temporary Skilled Migration Income Threshold of the day (currently $53,900)

 

It remains to be seen how employers will react to these new barriers in accessing foreign skills, particularly in the context of historically low unemployment and recognised skills shortages in the Australian labour market. The increased costs alone will have the (presumably desired) effect of cutting out all but medium to large enterprises from participating in the TSS programme.

 

Any business considering using the TSS programme is advised to understand exactly what the new risks entail, and to manage those risks using migration professionals with an understanding of the attendant employment law considerations.

The False Economy of Contemporary Skilled Visa Reform

skilled visa reform

This article explores the shift away from demand-driven economic migration policy, and the likely consequences of the coalition’s blueprint for skilled migration from 2018.

To say it has been a tumultuous year in the immigration space is no exaggeration.  Immigration Secretary Michael Pezzulo, Minster Peter Dutton, and Assistant Minister, Alex Hawke have superintended one of the biggest disruptions to the employer-sponsored visa framework since its inception.

Background

For years, the employer sponsored visa framework was the darling of a demand-driven system of skilled migration, facilitating Australia’s mining boom, and supplementing skilled shortages in key sectors of the Australian economy.  However, the 457 visa programme (and the gateway it provides to employer nominated permanent residence), has been the political plaything of successive governments keen to get tough on perceived visa rorts, and the impact on Australian jobseekers.  Whilst there have been well reported instances of visa fraud and exploitation, these are more politically significant than statistically so.

Reform Agenda

The headlines to most recent round of reforms have been broadly publicised since the joint-Prime / Ministerial announcements on 18 April 2017.   In broad brushstrokes, the changes involve:

  1. Rebadging the 457 visa programme to the Temporary Skill Shortage, or ‘TSS’ programme
  2. Removal of 216 occupations from the list of ‘sponsorable’ occupations for subclass 457 visa purposes
  3. Creation of 2-year and 4-year visa based on the occupational classification (with only the 4-year visa supporting a transition to employer sponsored permanent residence)
  4. Introduction of a caveat system which add additional criteria to a range of otherwise sponsorable occupations
  5. Implementation of universal labour market testing (unless inconsistent with international treaty obligations)
  6. Imposition of higher fees and training levies on sponsors
  7. Ratcheting up of skill, English and work experience criteria for applicants

The net effect of this staggered rollout has been significant, and some commentators have predicted the number of employer sponsored permanent residence grants will drop by two thirds of the current levels following the final phase of the reform package slated for early March 2018.

The changes appear to have been popular with voters (and the senate), and it is telling that the changes were not predicated on any consultation process with employer or industry groups.

Unintended Consequences

The creation of what is effectively a 2-year ‘guest worker’ visa was clearly designed to cool the numbers of visa grants based on those occupations.  However, the reality has been that numbers have been reduced to a trickle and businesses are finding it extremely difficult to attract anybody via the 457 visa programme because there is little or no prospect of a long term career for the foreign worker.

The irony is that by recognising that there is a short-term skill shortage in these occupations, the Commonwealth Government has effectively removed any incentive and blocked supply altogether.

Current unemployment sits at 5.4% (roughly half of its peak in 1992 and a third higher than its all-time low before the GFC in 2008).  Throughout the writer’s 13 years of practice in this area, use of the 457 visa programme has tracked reliably against to the unemployment rate of the day, (usually taking off at the 5% threshold).  This is a strong indicator that the programme, by and large, was a well calibrated supplement to skill shortages in Australia.  It is therefore difficult to reconcile the reform agenda with the sound economic policy underpinning the demand driven model made famous by the then DIAC Chief Economist, Mark Cully.

Case Study

In recent months, Atlassian has been a very vocal proponent of the 457 visa programme in print and television media. In a recent article in the Murdoch press, Atlassian co-chief executive Scott Farquhar hit out at the federal government’s cutback on skilled worker visas, saying the move will cost Australians jobs and signal to the world that the country is “closed for business”.

Atlassian famously employs around 1000 people in Australia with a relatively high proportion of them (variously 20-25%) holding subclass 457 visas.  The point of frustration for the Atlassian’s in Australia is that without these imported skills-sets in emerging industries, they – like many new-tech businesses –  cannot justify operating in Australia whilst waiting for our STEM initiatives to deliver the necessary skills.

Mr Farquhar goes on to state “The idea that if I bring in 100 people from overseas I will be taking away 100 jobs in Australia is not right”. “It will actually be creating jobs which would otherwise have gone to China or India or the US”.

It is not just STEM based roles that are affected. In the first round of changes to the 457 visa programme, the role of Recruitment Consultant was relegated to the 2-year 457 visa list, with additional criteria, and no prospects of employer nominated permanent residence. Fast forward 6 months and it is slated for removal from the 457 visa programme altogether. This is despite the fact that according to analysis conducted by job search portal ‘Indeed’,  Recruitment Consultant is among the top 20 most difficult vacancies to fill Australia-wide.

Tax Revenue

And there is already evidence of these roles being offshored. In the retail sector, retail buying, m-commerce and merchandising functions are now being been sent to overseas hubs, because it is extremely difficult to fill these roles locally, or attract overseas candidates without a long term opportunity.

At a minimum, this represents a loss to the revenue in terms of income tax, and other contribution to the economy of a tax paying expatriate employee, (which may also include premiums on student school fees, health insurance, and partial forfeiture of superannuation contributions). This is of course in addition to the many other economic, social, and cultural contributions made by temporary and permanent migrants to Australia.

Education Sector

Without a pathway to PR for bright graduates of the Australian tertiary sector, our education export earnings (a record $21.8 billion in 2016) are at appreciable risk.  It is certainly important to ensure that the quality of Australian higher education can stand alone without the promise of automatic permanent residence, and for the most part it does.  This is partly because international competition for foreign students is itself a key driver of innovation, excellence, and integrity in the tertiary sector. But it does no harm to Australia to re-circulate these skills within the domestic labour market (within existing net migration programming parameters). However, for most talented graduates, this will no longer be an option under the 457 visa programme.

Training Levy

From March 2018, a Skilling Australians Fund (SAF) levy will be imposed on sponsors when nominating a person for either a TSS visa or for an employer-nominated permanent residence visa. This levy ranges from $1,200 p.a. for the TSS visa, to a one off payment of $5,000 for a permanent visa applicant, and is designed to replace the ‘training benchmarks’ that currently exist in the 4557 visa programme.

This will relieve many sponsors from having to invest between one and two percent of payroll in training Australian employees or through industry training funds, Putting aside some unresolved issues relating to ‘double dipping’, it is understood that many business already meeting the benchmark/s consider this a tax on them for already doing the right thing.  With a finite training budget, the theory is that many businesses will need to carve out existing training budgets to pay the training fund levy.

Conclusion

It is difficult to see how throttling access to the international labour market is consistent with Australia’s interest in being competitive on the global stage.  The Department of Immigration and Border Protection is single-mindedly focussed on its border protection remit (the dominant culture since the merger in 2015), at the expense of an effective economic migration programme that has supported the Australian economy remarkably well for over 20 years.

If any of the probable consequences outlined above come as a surprise to the Government, then it is incumbent on our immigration leaders to pay more attention to economists, employers, industry, and Australian workers, in favour of making populist lurches for short term political advantage.

For inquiries, please contact Alex Kaufman, Head of Migration at FCB Smart Visa at +612 9922 5188 or ajk@fcbsmartvisa.com.au

Changes to Employer Sponsored Migration – Round Two: What You Need to Know

The second phase of the 457 (and related) visa reforms took effect from Saturday 1 July 2017. Despite some advance warning on the broader amendments, there are nevertheless some unannounced, but important changes which will impact sponsors, nominators and visa applicants alike. In summary, the changes include:

1. Creation of ENS occupation list/s (IMMI 17/080)

Eligible occupations for the ENS Direct Entry (DE) stream are detailed in a newly compiled Subclass 186 occupation list, which includes the Short-term Skilled Occupations List (STSOL) and Medium and Long-term Strategic Skills List (MLTSSL).
Certain ‘Inapplicability conditions’ (aka Caveats) now apply against 68 occupations between the STSOL and MLTSOL on the new ENS list. Like the Caveats introduced into the 457 visa programme, these conditions import additional criteria based on salary, location, level of skill/experience, turnover and/or staffing levels of the nominating business. The introduction of these Inapplicability conditions was not formally announced before this abrupt change.
For the time being, eligible occupations for ENS Temporary Residence Transition (TRT) stream purposes are not dependent on any particular list/s, and will continue to be based on the occupation corresponding with the most recently approved subclass 457 nomination.
There appears to be no mechanism that would make a TRT stream occupation subject to any Caveat/s that would otherwise apply to the same occupation if it were nominated under the Direct Entry stream.

RSMS will remain unaffected by changes to the occupation lists. Eligible occupations for RSMS will be ANZSCO skill level 1, 2 and 3 occupations (reproduced in the new Legislative Instrument IMMI 17/058).

2. Release of amended 457 occupation list/s (IMMI 17/060)

The much anticipated revisions to the 457 Short-term Skilled Occupation List (STSOL) and Medium and Long-term Strategic Skills List (MLTSSL) took effect from 1 July; notable changes include:

a) Addition of the following 12 occupations to the (457) MLTSSL supporting both a 4-year 457/TSS visa, and a pathway to employer nominated permanent residence:

 

 

 

 

 

 

 

 

b) Removal of Caveats to 8 occupations which were on the previous MLTSSL but ineligible for 457 or employer nominated permanent residence specifically because of the Caveats. The following occupations were subsequently made eligible for nomination under 457 ENS:

 

 

 

 

 

 

c) Reinstatement of the following 16 occupations to the457/TSS visa programme. Although these occupations are now back in contention, they only appear on the 2-year STSOL, and are therefore ineligible for employer nominated permanent residence after March 2018. Where
indicated, they are also subject to one or more Caveats.

 

 

 

 

 

 

 

 

 

 

d) Downgrading of two occupations to the STSOL from the previous MLTSSL, and an upgrade for 23 occupations which have been moved from the previous STSOL to the new MLTSSL.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

e) Removal of the following 9 occupations from inclusion under the 457/TSS and ENS (DE) programmes altogether:

 

 

 

 

 

 

 

 

3. Introduction of new ENS/RSMS English requirements (IMMI 17/058)

Primary applicants for ENS and RSMS visas made under the TRT stream who lodge applications on or after 1 July 2017 will require at least Competent English, as evidenced by an IELTS (or equivalent test) score of at least 6 in each component. The previous English language exemption for both ENS and RSMS visa applicants based on high earnings (>$180,001) has been removed. This will apply to all visa applications including those lodged before 1 July 2017 that have not been finalised. The English language exemption for applicants who have
completed at least five years of full-time study in a secondary and/or higher education institution where all of the tuition was delivered in English remains for the applications.

4. Specification of new 457 English requirements (IMMI 17/057)

Unless exempted, primary applicants for 457 (and future TSS) visas who lodge applications on or after 1 July 2017 will require one of the following English test scores to satisfy the English language criterion:

 

 

 

 

 

 

 

 

The previous English language exemption threshold relating to high earnings (base salary of >$96,400) has been removed, save for nominees who are employed by an overseas business which is their sponsor or an associated entity of their sponsor.
The standard exemptions for certain passport holders, diplomats, and those with 5 years of English language education remain.

5. Removal of ENS/RSMS Skills Exemption (IMMI 17/058)

Prior to 1 July, exemptions from the need to obtain skill assessments under the ENS/RSMS (DE stream) existed, where the primary applicant’s earnings were above the top marginal tax threshold ($180,001). This has also been removed by Legislative Instrument IMMI 17/058.

Like the related English exemption, the changes will also apply to all visa applications including those lodged before 1 July 2017 that are yet to be finalised. For pipeline applications seeking the exemption, the only way to avoid a refusal is in the following circumstances:

  • Where the applicant can demonstrate that they had a skill assessment in place at the time of application. This may occur for example if an applicant was registered by the body gazetted to issue skill assessments (as is the case with Medical Practitioners).
  • Where the nominee is otherwise exempted under the Legislative Instrument. Currently, this applies to certain researchers, scientists, technical specialists, university academics, New Zealand nationals and their subclass 461 family members.

Otherwise, there appears no remedy for an affected application save for withdrawing and re-lodging. This will not be of assistance to affected applicants who may have subsequently turned 45, for whom the consequences of the retrospective changes are particularly harsh.

6. Reduction of age limit for ENS/RSMS (Direct Entry) to 45 (IMMI 17/058)

From 1 July 2017, primary visa applicants for the ENS and RSMS Direct Entry (DE) stream must be under 45 years of age at the time of application. Age exemptions still exist for a limited class of persons including (in highly qualified circumstances): researchers, scientists, technical specialists, academics, New Zealand nationals and their 461 family members and medical practitioners.

The upper age limit for primary TRT stream applicants will remain at 50 years of age until March 2018 when the 45 year age limit will be universally imposed (unless specifically exempted). As previously reported, we are still unsure as to what age exemptions will be permitted after March 2018.

7. Introduction of ‘Genuine Need’ factor for ENS/RSMS (TRT/DE) nominations

The ENS/RSMS nomination criteria found under Migration Regulations have been amended to require that ENS and RSMS TRT stream nominations provide evidence of ‘genuine need’ for the person to work in the nominated position.
This (and a related consequential change to nomination criteria for ENS Direct Entry), means that there is now a universal requirement to demonstrate “genuine need” for a paid employee across the two main streams of the ENS and RSMS programmes, irrespective of if (or for how long) the position may have been filled by a 457 visa holder nominee.

8. Introduction of revised Training Benchmarks for 457/ENS (IMMI 17/045 and IMMI 17/074)

Two new Legislative Instruments have come into effect which revise the longstanding Training Benchmarks which must be met by standard business sponsors and ENS nominators. The DIBP have indicated that these represent incidental changes and/or simply clarify existing policy. This massively understates their significance, given that the following variations to the previous benchmarks appear to operate retrospectively for sponsors and nominators when demonstrating historical compliance with the training obligations:

Allowable Expenditure for Training Benchmark B

Variations to the expenditure that may count towards this benchmark include:

  • the addition of reasonable travelling costs to training venues
  • face to face training delivered by RTOs only where it contributes to an Australian Qualifications Framework qualification
  • the salary of persons whose sole role is to provide training to Australian employees (the previous benchmark allowed a portion of someone’s salary where providing training to Australian employees was a key part of their role – an enormous difference)

Expenditure that is not acceptable for Training Benchmark B

Variations to the expenditure that cannot count towards this benchmark include:

  • on the job training (many of our clients have used this type of training extensively so this will be a very difficult change)
  • training not relevant to the industry the business operates within. We have sought clarification in relation to
    WHS-related expenditure, including first aid courses
  • training undertaken by principals or their family members induction training of any kind
  • purchase of general software, membership fees, books, journals and magazine subscriptions
    attending conferences (unless for continuing professional development purposes), or exhibitor expenses at a trade show, conference or expo

Definition of Payroll

The definition of payroll has been clarified and essentially includes anything classified as wages under State/Territory payroll tax legislation, plus any payments to contractors and subcontractors, whether or not such payments are included for payroll tax purposes.
Although retrospective changes are allowable under law, it seems unreasonable to expect that sponsors who have adhered to their training obligations by providing training over preceding years based on the Training Benchmarks in force at that time, are now expected to show that they adhered to a different benchmark they could not have been aware of.

Once again, it appears harsh and unnecessary to have applied this change retrospectively, particularly when the Training Benchmarks will be replaced by the Skilling Australians Fund Levy in approximately 8 months’ time.

9. Liberalisation of Accredited Sponsorship programme

Accredited sponsors are approved for a sponsorship term of 6 years (as opposed to 5), receive priority processing of 457 nomination and visa applications, and enjoy additional streamlined processing of certain ‘low-risk’ nomination applications.

Recent changes have allowed access to a broader category of businesses (including smaller enterprises) on one of the following bases:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10. Additional changes to the 457/TSS visa programme

There have been a range of additional minor changes bundled with phase 2 of the 457 visa reform package. These include the introduction of a mandatory formal skills assessment process for more trade-related occupations for applicants from certain countries, as well as mandatory police clearances for all 457 applications lodged on or after 1 July 2017. Fee increases for 457 visa-related application charges (and in most other visa categories) have also now come into effect, as have more generous refund provisions under the Migration Regulations.
Although there has been unprecedented legislative and policy activity across the immigration and citizenship portfolios in recent months, only changes which directly relate to employer sponsored migration have been dealt with here.
On a final note, the retrospective nature of the reform package continues to be a cause for concern in terms of the workability of a stable, effective and equitable employer sponsored visa programme. FCB Smart Visa will be making representations at the highest levels of government to ensure the adverse effects of retrospectivity are better managed as a function of policy, and where possible, appropriate transitional arrangements.
The complexity and scope of the changes, and the dynamic nature of the 457/ TSS and ENS RSMS visa programmes makes it essential for businesses and visa holders to get astute and timely advice surrounding their immigration requirements.
For more information, please contact FCB Smart Visa on (+612) 9922 5188 or: Alex Kaufman: akj@fcbgroup.com.au

Recruiting Agencies Unite!

The Department of Employment is responsible for undertaking a regular review of the Short-term Skilled Occupation List (STSOL) and Medium and Long-term Strategic Skills List (MLTSSL). These occupation lists are used for employer-sponsored and skilled migration to meet short and medium/long term needs for the Australian economy.

The Department of Employment has today released a draft ‘traffic light bulletin’ that slates occupations for removal, retention, and/or cross-grades between the STSOL and MLTSSL.

What should be of major concern to recruitment agencies throughout the country is the real possibility that Recruitment Consultant (ANZSCO 223112) is removed altogether from the list of ‘sponsorable’ occupations for 457 / TSS visa purposes from January 2018. The other three occupations in the firing line are:

  • Accommodation and Hospitality Managers
  • Hair or Beauty Salon Manager
  • Building Associate

If stakeholders are concerned about the adverse consequences of removing these occupations from the 457 visa programme, they can contact us on 02 9922 5188 or register their submissions directly with the Department of Employment no later than 1 December 2017 using this portal.

ALERT: Transitional Arrangements Announced for Employer-Nominated Visas

Following DIBP commentary at the Migration Institute of Australia’s national conference in Melbourne last week, the DIBP has now officially shed some further light on the transitional arrangements that will apply to many people seeking employer-nominated permanent residence after the March 2018 round of legislative changes.

 
Specifically, the DIBP has now confirmed that people who held, or had applied for, a subclass 457 visa on 18 April 2017 will be able to access certain existing provisions under the Temporary Residence Transition stream, specifically:

 
1. Occupation requirements remain the same (i.e. there is no specific ‘list’ or other restrictions on the nominated occupation as long as the nominee continues to work in the same position for the same employer as approved for their subclass 457 visa).

 
2. Despite the introduction of a universal age ceiling of 45 from next March, the upper age limit for those using the transitional arrangements will remain at 50.

 
3. There will be no additional work experience requirement imposed for this cohort, and the current requirement to have worked at least two out of the three years prior to nomination on a subclass 457 will remain in place.

 
The welcome announcement gives some clarity to those who stood to be adversely affected from a wholesale change in the eligibility requirements. However, the limited information does not address a number of key scenarios, such as:

 
– Whether applying for a 457 visa renewal (or subsequent TSS application) after April 18 will affect the grandfathering arrangements.
– Whether transferring to a new employer by way of a nomination lodged after 18 April 2017 will affect the grandfathering arrangements.
– Whether refused 457 applications that were overturned on appeal after 18 April will be able benefit from the grandfathering provisions.

 
It is also conceivable that pipeline 457 applications (lodged before 18 April but still undecided), could be affected if the nominated occupation is removed from the next list of ‘sponsorable’ occupations (slated for January 2018) before the nomination is finalised. This issue arises from the combined effect of changing lists, blowouts in DIBP processing times, and the fact that the nomination criteria requires the occupation to be on the gazetted list at the time of nomination decision (not at the time lodgement).

 
There are a number of other possible scenarios that have not been addressed as yet, and we expect to be able to provide further clarity in the days and weeks ahead.

 

 

For inquiries, please contact Alex Kaufman, Head of Migration at FCB Smart Visa at +612 9922 5188 or ajk@fcbsmartvisa.com.au

Subclass 457 and Associated Visa Reforms: What you need to know?

The surprise announcement by the Prime Minister regarding the axing of the 457 Visa program has created a great deal of uncertainty for employers and foreign workers. While there has been limited regulations or official policy guidance notes released from the Coalition, our team at FCB Smart Visa has curated all available information to cut through some of the ambiguity and misinformation circulating at present.

At the outset, the abolition of the 457 visa program announced by Prime Minister Malcolm Turnbull on Tuesday 18 April 2017 is not a wholesale abolition of the employer sponsored visa regime. The politically charged 457 visa program will instead be replaced from March 2018 with a new category of visa, namely the Temporary Skill Shortage (‘TSS’) visa (subject to passage through both houses of parliament).

Download our whitepaper here

ALERT: What you need to know about the abolition of the 457 Visa Program

 

 

Following the Prime Minister’s highly publicised announcement today regarding the impending abolition of the 457 visa program, information has emerged of interim plans to replace the Skilled Occupation List (SOL) and Consolidated Skilled Occupation List (CSOL) effective 19 April, 2017.

According to the interdepartmental circular and the recently updated DIBP website, the Consolidated Sponsored Occupation List (CSOL) will be replaced by the Short Term Skilled Occupation List (STSOL). This will involve the removal of 200 occupations from the CSOL (listed below).

As well as narrowing the 457 occupation list, the abridging of the CSOL also affects the following subclasses:

  • Employer Nomination Scheme (subclass 186 Direct Entry)
  • Skilled Nominated (subclass 190)
  • State and Territory Nominated stream of the subclass 489 and some applicants for the Training visa (subclass 407)

In addition, 24 occupations listed on the STSOL will now only be eligible for positions located in regional Australia (for the subclass 457 and the subclass 186) and for the State and Territory Nominated stream of the subclass 489.  These regional occupations are also listed below.

Nominations in the removed occupations will not be processed from Wednesday 19 April 2017.

For a list of all occupations removed, click here.

Importantly, many other commonly used occupations in the program (e.g. Recruitment Consultant and Sales and Marketing Manager) have also had ‘caveats’ applied to them, which have created additional requirements, and in effect raised the bar to a higher level than many of the standard criteria for approval. Further details of these will be provided in subsequent news releases.

In addition, the Skilled Occupation List (SOL) is being replaced by the Medium and Long term Strategic Skills List (MLTSSL).  Occupations currently listed on the SOL will remain available for visas that use the SOL at the sole occupation list (the Skilled Independent (subclass 189), the Graduate Work stream of the Temporary Graduate (subclass 485) and the Eligible Relative Nominated stream of the Skilled Regional (Provisional) (subclass 489).  For all other visas that use occupation lists, there will be 16 occupations removed from the MLTSSL which is published here.

FCB Smart Visa will continue to provide updates on the 457 program as they become available. If you would like to discuss, please call one of our migration agents on 02 9922 5188.

457 News – Store Managers

We often get questions from clients around whether they can sponsor their retail store managers for a subclass 457 visa.  Under current policy, the short answer is that it is not appropriate to use the 457 programme to sponsor a Retail Manager, as it is not included in the Consolidated Sponsored Occupation List (CSOL). Current policy also dictates that sponsoring store managers using other occupations, such as Customer Service Manager (which is on the CSOL), is not appropriate.

However, the position has been qualified somewhat by the Department of Immigration and Border Protection (DIBP).

In a newly released circular relating to sponsoring management positions in the retail sector (particularly in relation to Store Manager positions) the DIBP has advised that they may be flexible with their assessment where the company:

  • Is setting up a number of stores in Australia for the first time; and,
  • Wishes to employ an experienced manager from overseas to manage and lead the new stores in Australia.

However, management of a ‘flagship’ store could conceivably take the role beyond that of a typical Store Manager, and into the realm of Specialist Managers (not elsewhere classified). In most cases applicants for this occupation require a positive skills assessment from VETASSESS, which is often difficult to obtain as it requires a formal qualification.  

Importantly, there are also limited exceptions to the skill assessment requirement and it is important to get a qualified assessment as to whether your business can access the flexibilities provided for in the current policy framework.

FCB Smart Visa will continue to provide updates on the 457 programme as they become available. If you would like to discuss, please call one of our migration agents on 02 9922 5188.

Populist rhetoric threatens to undermine subclass 457 visa program

Back in June, FCB Smart Visa reported on the ALP’s pre-election immigration policy platform concerning work-related visas.  The recent political upset in the U.S. has given Bill Shorten (amongst others) new political impetus in bringing immigration squarely back on to the agenda.

At last week’s Migration Institute of Australia National Conference, Shadow immigration spokesman – Shayne Neumann MP – reiterated his party’s commitment to an ‘Australia first’ policy and the use of labour market testing (LMT) to protect Australian jobs from overseas workers (at any given time, there are around 1.4 million temporary residents with some form of work rights in Australia).   Nobody would deny the political and economic significance of strong workforce participation, but the ALP’s LMT proposition appears to be mere political rhetoric, and the value of a new labour market testing regime is highly questionable on account of the following:

  1. Labour market testing for 457 visa applications is only relevant to around 3% of temporary visas carrying work rights in Australia
  2. It already exists for the majority of trade occupations, nursing occupations and engineering roles. The irony is that these are amongst the very occupations that have been cited by the ALP as jobs in need of protection through LMT
  3. It already exists by proxy for every occupation through the ‘market salary’ requirement – a test of the labour market to ascertain the appropriate salary to be paid to the primary visa holder
  4. It already exists by stealth for every occupation through the ‘genuine position’ requirement
  5. Unless case officers are required to sift through, and draw subjective conclusions from responses to job ads, it will be a futile exercise
  6. And if case officers are required to sift through, and draw subjective conclusions from responses to LMT efforts, it will be an unworkable, and extremely resource intensive exercise
  7. The overwhelming majority of industry and employer groups oppose it, the most recent Independent review of the 457 visa program recommended against it, and the OECD found it unreliable for such purposes
  8. Many will recall that universal LMT is effectively a ‘back to the future’ policy having been abolished over 10 years ago (until the qualified re-introduction of the current LMT regime in 2013)

 

Canary in the coal mine

There is a distinct correlation between the volume of 457 visas sought, and Australia’s unemployment rate.  Over the years, the writer has observed a substantial upswing of 457 visa work when national unemployment dips below 5%.  With a current seasonally adjusted unemployment rate of 5.8% and the lowest number of 457 visa grants in 7 years, this correlation appears to be intact, and is testament to the effectiveness of a demand-driven program.  The proposed adjustments are therefore unnecessary and seemingly contemptuous of Australian business’ needs.

Australia’s focal shift from primary and extractive industries to STEM-based economic outputs will require the input and skill of the world’s contemporary leaders in the field.  This can be achieved via collaborative research and other initiatives, but the international labour market is the most significant and obvious conduit to meeting skill shortages in this area.  Atlassian has been particularly vocal in citing the 457 visa program as a key determinant in its ability to operate a base in Australia.  With approximately 200 staff holding 457 visas, Atlassian is unashamedly a ‘power user’ of the program.  However the real story here is the 700 additional Australian employees who have a career in a strategic growth industry because of the 457 program; the significance of which rarely makes its way into populist political discourse.

There are any number of home-grown innovators in Atlassian’s position who plan to remain in Australia with the support of talent supplemented from overseas.  It is self-defeating for any business-friendly government to hamper access to this pool of expertise whilst baying for Australian business to be globally competitive in these industries in real time.

More than one solution

If the government and opposition want to weed out opportunistic sponsors, a more workable solution would be to simply shift the major cost base to the sponsor.  At present, the lodgement fees that must be borne by an existing business sponsor to nominate a 457 visa holder is $330 (or $750 for a first-time sponsor).  By contrast, unless the sponsoring business elects to pay for tor the visa charges on behalf of applicants (as many do), a family of four needs to pay a minimum of $2,650 in visa lodgement fees.  A premium on the Nomination stage would arguably ‘separate the wheat from the chaff’ without affecting sponsors doing the right thing.  At a minimum, this would be a fair exchange for an onerous and ineffectual universal LMT regime.

It is time to ditch the political bombast in favour of pragmatic solutions, and to prioritise the passage of the key recommendations made by the extensive independent review into this economically vital visa program.

Alex Kaufman

FCB Smart Visa

Changes to the temporary activity visa framework

The Department of Immigration and Border Protection (DIBP) has introduced a new temporary activity visa framework, which will come into effect on 19 November 2016. This change is designed to streamline the application process for individuals and businesses.

From 19 November, the following Subclasses will be closed for new applications:

  • Subclass 401 Temporary Work (Long Stay Activity) visa
  • Subclass 402 Training and Research visa
  • Subclass 416 Special Program visa
  • Subclass 420 Temporary Work (Entertainment) visa
  • Subclass 488 Superyacht Crew visa

These will be replaced by or amalgamated into:

  • Subclass 400 Temporary Work (Short Stay Specialist) visa

This visa would be for people who want to come to Australia on a temporary basis to:

  • undertake short-term, highly specialised, non-ongoing work
  • in limited circumstances, participate in an activity or work relating to Australia’s interests
  • Subclass 403 Temporary Work (International Relations) visa

This visa would be for people who want to come to Australia on a temporary basis:

  • in relation to a bilateral agreement
  • to represent a foreign government or to teach a foreign language in an Australian school
  • to undertake full-time domestic work for a diplomat
  • as a person with statutory privileges and immunities
  • to participate in the Seasonal Worker Programme
  • Subclass 407 Training visa

This visa would be for people who want to come to Australia on a temporary basis to undertake occupational training or participate in classroom based professional development activities.

  • Subclass 408 Temporary Activity visa

This visa would be for people who want to come to Australia on a temporary basis to:

  • work in the entertainment industry
  • participate in a non-ongoing cultural or social activities at the invitation of an Australian organisation
  • observe or participate as an academic in a research project
  • undertake full-time religious work
  • participate in a special programme to enhance international relations and cultural exchange
  • participate in high-level sports (including training)
  • work in a skilled position under a staff exchange arrangement
  • participate in an Australian government endorsed event
  • work as a superyacht crew member
  • undertake full-time domestic work in the household of certain senior foreign executives

The chart below, produced by the DIPB, shows the changes:

picture2

Points to note regarding these changes:

  • The majority of applications will be lodged online, with the exception of the Subclass 403 International Relations Visa, which will remain a paper-based application
  • The new 407 Training Visa will require a Nomination and Sponsorship, regardless of intended stay period. No Nomination is required if the Sponsor is a Commonwealth agency
  • One Sponsorship type will replace the existing six Sponsorship types, and this will be valid for a period of five years. Currently valid Sponsorships can only be used to sponsor new Visa applications until 19 May 2017
  • If applying for a Subclass 408 Temporary Activity Visa, the Visa applicant will not require a Nomination, and the following will also apply:
    • You will not need to be sponsored if applying outside Australia, and your intended stay period will be 3 months or less. If the intended stay period is beyond 3 months, a Sponsorship will be required
    • A Sponsorship will still be required if you apply from within Australia, regardless of the intended stay period

FCB Smart Visa will continue to provide updates on changes to the temporary activity visa framework when they become available.

If you have any migration matters that you would like to discuss, please call one of our migration agents on 02 9922 5188.