Australia: Changes to the temporary work (skilled) visa after 1 July 2017

IN BRIEF: RECENT CHANGES TO THE 457 VISA INCLUDE AMENDMENTS TO THE OCCUPATION LIST, EXPANSION OF SKILLS ASSESSMENTS, CHANGES TO TRAINING BENCHMARK AND MORE.

Notably, the Temporary Work (Skilled) visa (Subclass 457) (457 visa) will ultimately be abolished by March 2018. This was first announced on 18 April 2017 in a joint media release by the Hon Malcolm Turnbull MP, and the Hon Peter Dutton MP, Minister for Immigration and Border Protection.

A completely new Temporary Skills Shortage (TSS) visa will be available for two-year and four-year periods to foreign skilled workers.

The current projected completion date for implementation of all reforms is March 2018.

TO DATE - CHANGES TO THE 457 VISA

The new specific 457 visa legislative instruments introduced on 1 July 2017 resulted in numerous changes to the existing 457 visa application process.

These changes most obviously saw the condensing of occupation lists and expansion of mandatory skills assessment benchmarks.

AMENDMENT TO THE OCCUPATION LISTS IN THE 457 VISA

New additions were made to the occupation lists. Among the medium and long-term strategic skills list's additions were CEO, lecturer, CIO, economist, petroleum engineer, food technologist, geophysicist, life scientist and horse trainer.

Among the occupations added to the short-term skilled occupation list were aeroplane pilot, helicopter pilot, web developer and ICT support technicians. A total of 12 occupations were removed from the list, including equipment hire manager, fleet manager, picture framer, property manager, psychotherapist, real estate agent principal, real estate agent, real estate agent representative, ship's engineer, ship's master, ship's officer and university tutor.

Occupational caveats were also clarified and refined into three groups, including occupations relating to work experience, regional location, and occupation specific caveats.

In a press release, the Minister for Immigration and Border Protection Peter Dutton stated these amendments "will ensure the lists continue to reflect genuine skill needs in the labour market".

EXPANSION OF THE SKILLS ASSESSMENTS IN THE 457 VISA

The Trade Recognition Australia 457 Skills Assessment program expanded to include nationalities for a small number of existing trade occupations. Countries added to the list are Bangladesh, Nepal and Pakistan.

CHANGES TO TRAINING BENCHMARKS

By March 2018, business sponsors are no longer required to meet training benchmarks, instead they will be required to pay a contribution to the new ' Skilling Australians Fund'.

To improve clarity of the existing training benchmark, the Immigration and Border Protection Department introduced a new instrument, effective 1 July 2017.

The new instrument provides clarity on definitions such as payroll, stipulating payroll expenditure can occur either in the last financial year or the last 12 months, so long as the period corresponds to the payroll evidence provided.

The new instrument also restricts acceptable and non-acceptable training expenditure.

MANDATORY CHARACTER CHECKS NOW REQUIRED

Police certificates are now required for 457 visa applicants aged 17 and over. The check is required for each country the visa applicant has lived in for a total period of 12 or more months, over the last 10 years.

A military service record or discharge papers for applicants who are or have served in the armed forces over the last 10 years is also required.

CHANGES TO ENGLISH LANGUAGE EXEMPTIONS

The English Language Salary Exemption Threshold which exempts applicants whose salary is above $96,400 per annum, is no longer available for 457 visas.

EXPANSION OF SPONSORSHIP ACCREDITATION

On 1 July 2017, characteristics of a Standard Business Sponsor (sponsor) to become an "Accredited Sponsor" were given a new set of expanded criteria.

Sponsors can now apply for accreditation status by lodging a sponsorship variation application and requesting consideration. Successful sponsors receive sponsorship validation for six years.

In order to qualify for accreditation status, a sponsor must meet the expanded accreditation criteria. There are four accreditation categories:

Category Required characteristics
Category one: Commonwealth, State or Territory government agency Requires any Commonwealth, State or Territory government agency to have at least 75% of Australian workers comprising of their workforce in Australia
Category two: Australian Trusted Traders Requires Australian Trusted Traders to have at least 75% of Australian workers comprising of their workforce in Australia
Category three: Low volume usage and high percentage of Australian workers Requires any active 457 visa sponsors of at least two years, who have sponsored at least one primary 457 visa holder in the two years prior to applying for accreditation status, to have at least 90% of Australian workers comprising of their workforce in Australia.

Sponsors are also required for the last two years, to be a publically listed company or a private company with at least AUD 4 million annual turnover, have a non-approval rate of less than 3%, and have provided details of all business activities and principals/directors of their business.
Category four: High volume usage and medium percentage of Australian workers
Comprises of the same requirements in Category 3, except for: 
  • Sponsors are required to have sponsored at least ten primary 457 visa holders in the two years prior to their application for accreditation; and
  • Sponsors are only required to have at least 75% of Australian workers comprising of their workforce in Australia

Categories two, three and four provide sponsors to engage 457 visa holders as employees under a written contract of employment. They must pay all Australian employees in accordance with an Enterprise Agreement or internal salary table which reflects current market salary rates for all occupations in their business.

Each of the four accreditation categories must provide additional documentation as part of the accreditation process, including a copy of a contract template the employer uses, copies of applicable Enterprise Agreements or internal salary tables, profit and loss statements, BAS, annual reports and current/historical extract from ASIC.

FEE INCREASES

All application fees for Australian visas were increased from 1 July 2017. Visa Application Charges (VAC) will continue to increase each 1 July.

WHAT WILL EMPLOYEES AND EMPLOYERS NEED TO DO?

Employees currently subject to the 457 visas must understand the short and medium-term effects of the 1 July 2017 changes on their current working arrangements. Employees and their employers should review the impact of these changes on their current working and hiring arrangements.

The 1 July 2017 changes have been published on the Department of Immigration and Border Protection website.

HOW CAN COLIN BIGGERS & PAISLEY HELP?

We have an experienced team of lawyers, who can assist you to navigate the new 1 July 2017 changes or concerns about your 457 visa status, how the occupation list affects you and the transition to the new TSS visa.

Megan Kavanagh
Anisa Memari
Colin Biggers & Paisley

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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