Australia: How managerial positions have been affected by changes to the skilled visa scheme

On 18 March 2018, the Temporary Work (Skilled) (subclass 457) visa, more commonly known as the '457 visa' was abolished and replaced with a new skilled visa scheme, called the Temporary Skill Shortage (subclass 482) visa ('TSS visa').

Discussions surrounding the changes to the 457 visa came well before its demise.  On 18 April 2017, the Turnbull government announced that some changes to the 457 visa would be effective immediately, some would commence 1 July 2017, and more would be implemented before 18 March 2018.

Now that all proposed changes have come into effect and the dust has somewhat settled, employers are once again enquiring about the requirements for sponsoring skilled workers.

The TSS visa was first introduced as part of a Federal Government's 'Putting Australian Workers First' campaign.  Compared to the 457 visa, the TSS visa requirements are more stringent and onerous, for both employer and the sponsored employee.

One of the changes that took immediate effect following the 18 April 2017 announcement was that caveats were applied to certain occupations. These caveats allowed the government to put restrictions on certain occupations, such as where the work was allowed to be performed, the base salary for the occupation, and the minimum annual turnover that the employer had to have. For example, a sponsored Corporate General Manager is now required to have a salary of at least $180,001 and a Corporate Services Manager is required to have a salary of at least $80,000 and can only work in a business with an annual turnover of more than $1,000,000.

These caveats mean that sponsoring an employee in a managerial position is no longer an option for many small businesses with annual turnovers of less than $1,000,000, and for those that do meet the turnover requirements, the cost associated with sponsoring that employee has become much higher.

In addition to the changes relating to salary and turnover requirements, the list of occupations that were previously eligible for sponsorship under the 457 regime was split into a short term list (the Short Term Skilled Occupations List ['STSOL']) and a medium term list (the Medium and Long Term Strategic Skills List ['MLTSSL']). Occupations on the STSOL were subsequently only able to obtain visas for up to 2 years, and the pathway to employer sponsored permanent residency was taken away. Only those workers whose occupations are listed on the MLTSSL could apply for employer sponsored permanent residency, and were able to obtain visas for a longer duration of up to 4 years.

Whilst Chief Executives and Managing Directors had originally been moved to STSOL from 18 April 2017, a number of employer lobby groups such as Australian Industry Group pressured the government to move Chief Executives and Managing Directors from the STSOL to the MLTSSL, which the government did on 1 July 2018. With this said, many other managerial positions remain on the STSOL.

The following table shows some of the managerial and executive positions that have been affected, as well as some of the caveats that apply to them. It also shows whether the occupation is on the STSOL or MLTSSL.

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