The Australian visa system was always labyrinthine in its complexity, and just when you thought you understood it, along come some dramatic changes.
The immigration law firm Fragomen, are acknowledged experts in the area. Partner, Chris Spentzaris, has written the following blog for the benefit of our clients who are grappling with these changes.
Thank you Chris and we hope that our many friends in the global mobility industry find this useful.
The 457 visa is now a thing of the past. Are you prepared for the new TSS visa and what it means for your business?
The final stage of the immigration reforms to Australia’s flagship temporary work visa was implemented on 18 March 2018, resulting in the 457 visa being replaced with the Temporary Skill Shortage (TSS) visa.
What does this mean for your business’ mobility program and ability to bring foreign workers or intra-company transferees to Australia?
Key changes to the temporary work visa program
Here is a summary of some of the key changes that may affect your business’ ability and approach to sponsoring foreign workers going forward:
1. Labour Market Testing (LMT)
Prior to the 18 March 2018, most nomination applications were exempt from the requirement to undertake LMT due to a Skill/Occupation exemption being available. However, this exemption has now been removed.
Legislation which further tightens the LMT requirements is still currently before Parliament and yet to be passed. However, in the interim, the Department has released new policy guidelines with detailed information on the advertising requirements to meet LMT.
The policy requires at least two English advertisements in an Australian national recruitment website, print media or radio for a period of at least 21 consecutive calendar days:
- in the 12 months immediately before lodging the nomination application (or six months for nomination applications lodged on or after 18 June 2018); and
- after any redundancies or retrenchments in the nominated occupation in the sponsor’s business (or an associated entity) in the four months prior to the application.
Such advertisements should contain the job title / position description, name of the sponsor or recruitment agency and the salary (or salary range) for the position, unless it is over the Fair Work High Income Threshold (Currently $142,000pa).
It is important to note that the above is policy only at this stage and the Department has confirmed that there will be some flexibility exercised in terms of the number of advertisements, the duration of the advertising and the content of the advertisements until the legislation is passed, provided that sponsors can demonstrate that the manner in which LMT was undertaken was of sufficient coverage and duration to effectively test the Australian labour market. It is intended that once the new legislation is passed, the above policy settings will become law.
Alternative evidence (i.e. other than by advertising) may be accepted where the individual has an internationally recognised record of exceptional achievement in their field, by way of a submission explaining the reasons why the individual’s skills are unique and there are therefore no suitably qualified and experienced Australians readily available to perform the role.
Where the position is an intra-company transfer, then under recently released policy guidelines, the Department will also accept evidence of the transfer in lieu of advertising.
The circumstances where LMT would not be required based on the international trade obligations include:
- Nationality exemption applying to certain passport holders
- Intra-company transfer exemption where individuals are transferring from an associated entity based in certain countries
- Executive or Senior Manager exemption
- Renewal exemption, where the individual has been working in Australia for 2 years with the nominating employer
The new LMT requirement can significantly affect the lead time to having your assignee on the ground in Australia and thus may require engagement with recruitment teams and hiring managers to manage expectations.
2. Skilling Australians Fund (SAF) levy
Also subject to passage of legislation, the SAF levy will come into effect, noting however, that training benchmarks will still need to be met until that time. The SAF levy will be payable at time of TSS nomination and depending on the business annual turnover, will amount to $1,200 per year (turnover of less than $10 million) or $1,800 per year (turnover of at least $10 million). The SAF levy will also apply for permanent residence visa applications sponsored by your business (a one off amount of $3,000 and $5,000 respectively).
As a result of SAF levy implementation, businesses will no doubt need to give more thought to the business justification for sponsoring a foreign employee and the length of time they will be required in Australia to avoid unnecessary costs to the business in relation to the levy.
3. Changes to occupations lists
The TSS visa program continues to have two occupations lists namely Short-term Skilled Occupations List (STSOL) and Medium and Long-term Strategic Skills List (MLTSSL) which will be reviewed on regular basis by the Department of Jobs and Small Business. Caveats will also continue to apply to certain occupations restricting access to TSS visa for certain businesses / positions.
Businesses must be mindful of restrictions that apply to nominated occupations on the STSOL relating to the length of TSS visa (maximum 2 years) and one onshore visa renewal only. For example, STSOL occupations include Sales & Marketing Manager, Finance Manager, HR Manager, ICT Business Development or Project Manager.
Unless transitional provisions apply, there is also no employer sponsored permanent residence pathway for occupations on STSOL which is an important consideration in terms of talent attraction and retention strategies. This is something that should be communicated to the assignee upfront to manage their expectations of a longer term stay in Australia.
MLTSSL occupations include for example Corporate General Manager, Chief Executive or Managing Director or Chief Information Officer. Where the nominated occupation is on MLTSSL, the TSS visa can be granted for a maximum period of four years and renewed onshore without restrictions. A permanent residence pathway is available to those occupations after a period of three years (instead of current two years, except where transitional provisions apply), but the age limit for Employer Nomination Scheme visa dropped to 45 unless an exemption is available. In a positive move, the age exemption for those who have worked for their employer for at least 4 years, earning the Fair Work High Income Threshold has now been revised down from 4 years to 3 years.
4. Genuine Temporary Entrant (GTE) requirement
GTE is a new requirement for STSOL occupations and will affect the ability of some foreign workers to apply for a further TSS visa onshore. Those affected include individuals who have:
- held more than 2 x TSS visas in STSOL occupations in the last 5 years, or
- been in Australia on any visa for a period of four years or more AND the Department has certain concerns that the individual does not have an intention to remain in Australia temporarily in line with the purpose of the TSS visa.
With the increasing processing times of 457 / TSS visa currently at around 5-8 months, we strongly encourage businesses to review their eligibility for Accredited Sponsorship status. As Accredited Sponsors, businesses have access to priority processing times of approximately 1-2 weeks, streamlined processing and auto-approval for low risk nomination applications and sponsorship renewals.
Focus on Immigration Compliance
The Department of Home Affairs (the Department) has also indicated they will focus on ensuring sponsors use the TSS visa program in line with its purpose and comply with the sponsorship obligations.
Since the beginning of the year, we have already seen an increase in monitoring activity by the Department. Breaches of sponsorship obligations may lead to penalties and in case of more serious contraventions, fines, sponsorship bar or cancellation. The Department will also soon be publishing names of sanctioned sponsors which can have serious consequences for your business’ reputation.
If you have any concerns with regards to your immigration compliance, or have been meaning to do a compliance health check, now is the right time to ensure your business is compliant in its use of the 457 / TSS visa program and ready for a Departmental audit or onsite visit.
As with any changes to the migration program there are a number of important considerations that need to be taken into account in terms of talent, workforce and business planning. Be proactive in initiating those discussions to make sure your business has the right action plan following the changes. Having a trusted immigration adviser that can partner with you to lead you through these changes and establish the right processes from the outset is critical.
For further up to date information on Australian Immigration Reforms, we invite you to Fragomen’s dedicated TSS reforms page
If you would like assistance, please do not hesitate to contact me, or our TSS reforms team at [email protected]