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It has been replaced by the Subclass 482 Temporary Skilled Shortage visa programme (TSS), which – by and large – is a rebranded and remodelled version of its predecessor.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.

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