By Ian Parker, Migration Agent
There’s been a lot of press and hype around the changes to the 457 visa system – so what does it really mean for employers who employ workers on a 457 visa?
Background
The original 457 visa required applicants to have a skill on the Consolidated Sponsored Occupation List (CSOL). The list was a broad list of general skilled occupations and was considered the lesser of two lists, with the Skilled Occupation List (SOL) being the most important for skilled applications. However, you only needed to have a skill on the CSOL list to obtain the visa and have an option for permanent residency. A 457 visa was valid for 4 years and after two years an employee could make an application for permanent residency.
The changes
As of March 2018, the 457 visa program will be replaced with a new Temporary Skill Shortage (TSS) visa. The new TSS visa will include a greater focus on English language proficiency, labour market testing and previous skilled work experience. The new TSS visa programme will be comprised of a Short-Term stream of up to two years and a Medium-Term stream of up to four years.
Key changes include:
- New condensed skilled occupation lists – a Short Term Skilled Occupation List (STSOL) and Medium and Long Term Skilled Occupation List (MLTSOL)
- Minimum two years’ work experience (even with relevant qualifications)
- Labour market testing for all occupations
- Visa period of two years (for occupations on the STSOL) or four years (for occupations on the MLTSOL)
- Police clearances
- A new training fund for sponsors
In other words, anyone with a skill on the STSOL, which entirely replaces the CSOL list, can apply for the TSS visa but it will only be valid for two years and there will be NO option for permanent residency. This is a very significant downgrade, similar to a two-year working holiday visa. If you have a skill on the MLTSSL – which entirely replaces the SOL list – you can apply for the 4 year TSS visa and have a pathway to permanent residency after 3 years (previously 2 years).
Prime Minister Malcolm Turnbull has also warned employers about proper market testing, saying they will be publicly shamed if they try to abuse the system. He said employers must demonstrate they have tested the local jobs market properly before they apply for foreign workers under his new scheme, stating that “if they fail to meet their requirements, details of their failure will be published.”
“We’re going to be transparent about this … where employers break their obligations they won’t be able to get further people in under visas.”
In addition to these changes, the Department of Immigration and Border Protection has removed 216 job titles from both lists and added additional ‘caveats’ to 59 jobs. These changes are effective immediately from the 19th of April 2017. All of the other changes will be introduced over the next 11 months.
What about current visa holders?
The changes do not immediately affect current visa holders. Immigration Minister Peter Dutton said there would be a grandfathering arrangement for current visa holders and the changes would prevent the “open-ended” nature of the scheme.
“The existing 457 visa program is conducted for a period of four years, but essentially it is open-ended, and it results, in many cases, in a migration outcome,” he said. “What we propose is that under the temporary skills shortage visa short-term stream there will be a two-year visa, with the option of two years, but there won’t be permanent residency outcomes at the end of that.”
What does this mean for retail and fast food employers?
The Department of Immigration and Border Protection have made the skill level a lot higher for people that want permanent residency, that is, you need to be a doctor, a lawyer, nurse, or other highly skilled professional. Positions deemed lower-rank or ‘short-term’, such as sales managers, customer service managers and cooks, will have little to no chance of obtaining permanent residency and will only be issued a visa for two years, with the option to renew only once.
The ramifications of the announcement are already evident with many applicants and companies withdrawing applications currently in the system, as these will now be made either invalid or highly unlikely to succeed.
Timeline of 457 changes
- From 19 April 2017
- 216 occupations removed and 59 others restricted
- 24 occupations restricted to regional Australia
- occupational lists renamed
- validity period for occupations on STSOL reduced to 2 years
- From 01 July 2017
- English salary exemption $96,400 to be removed
- training benchmarks to be changed
- mandatory penal clearance certificates
- Before 31 December 2017
- collection of TFN for 457 visa holders for ATO data matching
- publication of sanctioned sponsors
- From March 2018
- 457 visa abolished and replaced with TSS visa which will comprise the Short-Term (2 years) and Medium-Term stream (4 years)
Timeline of 186/187 changes
- From 19 April 2017
- CSOL condensed with 216 occupations removed
- 24 occupations restricted to regional Australia
- occupational lists renamed as STSOL and MLTSSL
- From 01 July 2017
- review of STSOL and MLTSSL
- International English Language Testing System (IELTS) 6 required in each component
- changes in age – Direct Entry stream 45 years old, no change to Temporary Residence Transition(TRT)
- Before 31 December 2017
- collection of Tax File Number for 457 visa holders for ATO data matching
- publication of sanctioned sponsors
- From March 2018
- the MLTSSL will apply to Employer Nomination Scheme (ENS)/Regional Sponsored Migration Scheme (RSMS) with additional regional occupations
- market salary rate will apply and meet the Temporary Skilled Migration Income Threshold (TSMIT)
- eligibility period for permanent residency extended from 2 to 3 years
- at least 3 years’ work experience required, under 45 years of age
- contribution towards training fund
Need help navigating the changes or want to know more? Contact NRA Legal for specialist migration advice on 1800 RETAIL (1800 738 245).