Australia: 1 July changes to Temporary Work 457 and Employer Nomination Scheme visas

Last Updated: 3 July 2017
Article by Jackson Taylor

Critical changes and take-away for employers and visa holders

The Department of Immigration have created almost as much hype and tension as the season premiere of Game of Thrones in the lead up to the 1 July changes to the 457 visa laws. And the action has not disappointed. Numerous changes were introduced, including creation of separate occupation lists for different visa subclasses, occupations being added and removed from lists, changes to the Training Benchmark system, and removal of some exemptions. Throw in some retrospective legislation and the Department has gone a long way towards delivering all the drama and suspense of the blockbuster television series.

The Changes

Many of the changes made 1 July are intended to lessen the impact of the rushed April 2017 amendments, such as restoring a pathway to permanent residency for high value skill occupations or ensuring that international trade obligations are appropriately recognised.

The changes should be welcomed however several outstanding issues remain, including the Department's continued implementation of changes with retrospective effect and the lack of a pathway to permanent residency for the majority of 457 visa holders.

Temporary Work Subclass 457 visa

The 457 visa has been the main focus of the recent changes and the largest number of changes apply to this subclass.

Amendment to the occupation lists

Changes to the 457 STSOL and MLTSSL will apply to lodged but undecided applications.

Occupations were added to the MLTSSL: CEO, lecturer, CIO, economist, petroleum engineer, food technologist, geophysicist, life scientist, horse trainer, etc.

Further occupations were added to the STSOL: aeroplane pilot, helicopter pilot, ICT support technicians, web developer, etc.

12 occupations were removed entirely.

Refined caveats & regulatory amendment to ensure legality of caveats

Caveats have been refined and clarified. Caveats are grouped into work experience requirements, regional, and occupation specific. More information here.

Additional regulations were introduced to ensure that the Minister has the power to create caveats.

Changes to English exemptions

The English language exemption for applicants earning $96,400 AU per annum has been removed for applications made after 1 July 2017.

A new exemption has been introduced for employees of overseas businesses, working for the overseas or an associated entity, who will receive $96,400 or more.

Minor amendments to the 2 and 4 year visa validity

Applicants whose occupation appears on the STSOL will be eligible for a 2 year visa only. Where the applicants' occupation is on the MLTSSL the visa will be granted for 4 years.

Where the occupation is on the STSOL but international trade obligations apply (such as WTO, FTA, etc.) then the visa will be granted for 4 years.

Mandatory police clearances

Police clearances will be required for all applicants aged 17 or over. Clearances are required from each country the applicant has been resident in for a period of 12 months or more (cumulatively) over the past 10 years or since turning 16.

Expanded Skills Assessments

Addition of new countries to the existing Trades Recognition Australia 457 Skills Assessment program for trade occupations.

Stricter Training Benchmarks

Training Benchmarks A and B have been tightened. The range of authorised training funds have been reduced and acceptable training has been limited in part by removing eligibility of training to principals and limiting internal training.

Expanded criteria for Accreditation

An expanded range of criteria will enable a larger number of sponsors to obtain Accreditation. Categories include 'low volume' users with more than 90% local workforce, high volume users with at least 75% local workforce, government agencies, and businesses operating as 'trusted traders' under the Customs program.

Employer Nomination Scheme Subclass 186 visa

These changes made to the ENS 186 visa will impact applicants for permanent residency from 1 July 2017 and in some cases applications made prior to the date.

Occupation lists

Separate MLTSSL and STSOL lists have been established for the 186 visa. Occupations on the 186 STSOL will continue to qualify for access to the 186 visa. It is expected the STSOL will be removed in March 2018.

Changes to the occupation lists will not apply to already lodged applications.

Caveats

Caveats will now apply to 186 applications lodged from 1 July.

No further nominations

New regulations will prevent lodgement of a second nomination where the first 186 nomination was refused. This approach had been used to 'rectify' a lodged 186 or 187 application where the nomination was refused and the visa application charges would be lost if a new nomination was not lodged and approved.

Refunds

New refund provisions will apply to 186 and 187 visas to enable DIBP to refund visa application charges where an application is made incorrectly or a nomination is refused due to circumstances beyond the control of the visa applicant.

Age reduction for Direct Entry (DE) stream

For 186 and 187 DE stream visa applicants must be under 45 at the time of application.

A reduction of the age criterion to 45 for the 186 and 187 Temporary Resident Transition stream is expected for March 2018.

Age exemptions for 186 and 187 Direct Entry and Temporary Resident Transition (TRT) streams

Exemptions to the age limitation for both streams have been retained including:

-Researchers, scientists and technical specialists nominated by Australian scientific agencies
-Academics employed at Academic Level B, C, D, or E as a University Lecturer or Faculty Head
-Medical Practitioners who have been employed for at least 4 years with 2 years in a regional area

Exemptions to the DE age limit:

- For New Zealand citizens who have been working in the nominated occupation for the nominated employer for two in the past 3 years.

Exemptions to the TRT age limit:

- For 457 visa holders who have been employed for at least 4 years and whose income was above the Fair Work High Income Threshold in each year.

Increase in English requirement for TRT

English language requirement will increase to a minimum band score of 6.0 in the IELTS test or equivalent.

English exemptions for DE Stream high income earners removed

Previously applicants who received base remuneration of $180,00 English were not required to demonstrate English language ability. This exemption has been removed and applies to applicants who have a lodged but undecided application. The effect is that this change will operate retrospectively. Applicants may qualify for a refund in some circumstances.

Skills Exemptions for DE Stream high income earners removed

Previously applicants who received base remuneration of $180,001 per annum were exempt from providing a skills assessment as part of the application process. This exemption has been removed and applies to applicants who have a lodged but undecided application. The effect is that this change will operate retrospectively. Applicants may qualify for a refund in some circumstances

Introduction of 'Genuine Need' requirement for 186 TRT

Sponsors will be required to demonstrate a 'genuine need' for the skilled position nominated under the 186 TRT pathway. This will include an assessment of whether the position is aligned with the nature and scope of the business.

Training Subclass 407 visa

New Occupation List

Separate STSOL and MLTSSL have been released for the 407 visa.

Analysis

The changes, while carrying through the early commitments of the government, have to some extent softened the impact of the April changes. Reforms to the occupation lists improve obvious oversights in the April lists, such as the inclusion of scientists, engineers, and C-Suite occupations to the MLTSSL. However, the changes retain the inherent uncertainty of relying on 'dynamic' skills lists. This uncertainty will remain, at least until DIBP clarify what protections existing visa holders will have to apply for permanent residency post March 2018.

The post 1 July framework also raises broader concerns about the removal of permanent residency pathway for occupations on the STSOL and how this will impact employers' recruitment and retention policies. The lack of pathway to permanent residency for 50-60% of 457 visa holders also raises broader issues related to multiculturalism and the creation of a 'guest worker' system, particularly in lower skilled and trades occupations.

Another aspect of the changes that will prove challenging for businesses to manage is delays in processing related to police clearances. Businesses will need to plan applications in advance to minimise delays.

The Department has still not finalised its approach on how to integrate international trade obligations into the new framework and further updates in this area are expected shortly.

The tightening of the Training Benchmark is unlikely to be welcomed as it significantly reduces acceptable training, however will only remain in place until March 2018.

Broader criteria for access to Accredited Sponsorship are unlikely to be attractive to most employers who have not already sought accreditation. The utility for low risk, low volume users of the program to complete the accreditation program is likely to limited.

The changes to the permanent residency 186 and 187 visas are as expected with the unfortunate exception of skill and English changes applying to applicants who applied pre-1 July. This retrospective change is to some degree offset by new refund provisions, however, some applicants may now be without further options for permanent residency due to the reduction in the maximum age.

Conclusion

The 1 July changes remove some of the overreach of the April changes. There are, however, serious concerns about the impact of the removal of a permanent residency pathway and how it will impact employers, prospective 457 visa applicants, and current 457 visa holders. Recruitment and retention will be impacted and employers will need to review their approach to recruiting overseas talent.

The retention of several exemptions for access to permanent residency is welcome but it is of concern that the government continues to introduce regulations that operate in a retrospective manner, which harm existing applicants, in some cases with limited options for legal redress.

It is hoped that the Department will adopt greater transparency in determining which occupations are retained on the skills lists and enable employers and industry bodies to make submissions on which occupations need to be added to the Medium and Long Term Skill Shortage list in future. It is also worth advocating that the Department announce changes in advance of future changes to ensure that existing visa holders' rights and access to permanency are protected.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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