Australia: Navigating the visa program overhaul: Key challenges for employer sponsors

Last Updated: 19 July 2018
Article by Rebecca Macmillan
Most Read Contributor in Australia, September 2018

Over the past 18 months we have experienced the largest reform to the employer sponsored visa programs since 2012. The changes announced in April 2017 have been introduced with the exception of the Skilling Australia Fund (the training levy) which is expected to commence soon.

On the most part these changes have had little impact on a business's ability to sponsor a skilled foreign worker, however they have also brought about a couple of key challenges:

  • labour market testing
  • predicting whether a sponsored worker may be eligible for permanent residence.

The Government has also announced a new pilot program to attract the best of global talent to Australia.

Labour market testing

With the introduction of labour market testing, employers have had to change their recruitment strategies. Employers now need to ensure at least two job advertisements are placed in national publications within the six months before nominating a foreign worker, and these job advertisements need to run for a minimum of 21 days. These requirements will soon change to require advertising to run for at least 28 days within four months before nominating a foreign worker.

At the introduction of the changes, the Department of Home Affairs (the Department) was not accepting LinkedIn as a suitable platform for advertising vacant positions. The good news is, the Department's position on this has now changed and LinkedIn advertisements are acceptable.

The list of acceptable labour market testing platforms continues to be narrow and the exemptions ever narrower. Regardless of whether or not your business is wanting to nominate a foreign worker for the role, our advice is:

  • make sure you advertise your job advertisements in two national publications
  • be sure to include the salary on the job advertisement
  • keep a copy of every job advertisements you place the advert because it can be difficult to obtain a copy once it has expired
  • keep a copy of the receipts/tax invoices with the job advertisement.

If, as a result of your recruitment efforts, your business employs a Working Holiday Visa holder bear in mind that while that person can work for your business for up to six months, the labour market testing has a shelf life. You will need to ensure you submit a TSS visa application for that foreign worker before your labour market testing expires or risk having to advertise the position again.

Permanent residence for sponsored employees

Previously, overseas employees were eligible to transition to permanent residence after working for their sponsoring employer for two years. In March 2018 the requirements for permanent residence changed significantly and there is no longer a guaranteed pathway to permanent residence.

As a sponsoring employer you may be asked by your overseas employees if the business can assist with permanent residence, and this is often a key consideration for foreign workers when making the big decision to move to another country. We have summarised below the key points which will assist you when having these conversations.

  • eligibility to transition from the TSS/457 visa to permanent resident has increased from two years to three years
  • only occupations on the Medium to Long Term Occupation List are eligible to transition to permanent residence. This does not mean that a TSS/457 visa granted on the basis of the occupation being on the Medium to Long Term List is automatically eligible – the occupation needs to still be on the list at the time the foreign worker wants to apply for permanent residence – this is the catch!
  • the age limit has been reduced to 45 years. In addition to the occupation being on the Medium to Long Term List, foreign workers over 45 years of age will need to earn a salary above the Fair Work High Income Threshold to be eligible.
  • the Direct Entry pathway is still available. This requires the overseas worker to be have a skills assessment in their nominated occupation and at least three years of relevant work experience. The occupation must also be on the Medium to Long Term List. This pathway is a good alternative to the temporary residence transition because a foreign worker can apply at any time provided they satisfy the eligibility criteria.
  • the criteria above does not apply to overseas workers who applied for, or were granted a visa a Subclass 457 visa before 18 April 2017. For this group of people the previous temporary residence pathway is available. That is:
    • they can apply after two years working with the same employer instead of new 3 year requirement
    • the age limit is up to 50 years and the age exemption is still available
    • it does not matter which list the nominated occupation is on. This means, the occupation can be removed from the occupation lists completely and the foreign worker is still eligible to transition to permanent residence.

Global Talent Scheme

On 1 July 2018 the Global Talent Scheme (GTS) pilot program commenced. The GTS is aimed at employers looking to fill highly skilled positions that cannot be filled by Australian workers, or through other visa programs, in particular the short-term and medium-term streams of the TSS visa.

This pilot program is available to established businesses which are publicly listed or have an annual turnover of at least $4 million for each of the past two years. The position must also receive a minimum annual earnings of $180,000.

A GTS stream is also available for start-up businesses operating in STEM (science, technology, engineering and mathematics) related fields. Start-up businesses wishing to access this program will need to be endorsed by an independent GTS start-up panel.

The GTS program looks promising and we can see it being a big benefit to established businesses looking to employ highly skilled occupations which are not on the TSS occupation lists.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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Rebecca Macmillan
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