On 18 March 2018, the Temporary Skill Shortage (TSS) (Class GK) (Subclass 482) visa came into effect, while applications for the Subclass 457 visa were closed. This represented the culmination of near a year of gradual changes since the Australian Department of Home Affairs (the Department) announced the reforms to the Subclass 457 visa program in April 2017.
Below is our breakdown of the major changes that have been implemented with a comparison of the prior requirements under the 457 visa (relating to both the nomination requirements by the sponsor and the visa eligibility requirements for the applicant).
Nominations
Prior (457) |
Current (TSS) |
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(1) Training benchmark / training levy |
The sponsor/nominator has to meet the training benchmarks. |
Training obligations must continue to be met until implementation of Skilling Australia Fund (SAF) levy – currently before Parliament. The sponsor must pay a levy into the SAF upon passage of legislation (see here). |
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(2) Labour Market Testing |
Unless international trade obligations (ITOs) apply, mandatory for nursing, engineering, and trade occupations. |
Unless international trade obligations (ITOs) apply, mandatory for all occupations. This needs to have been undertaken with the period of: (1) 12 months immediately before the nomination applications lodged for applications lodged after 18 March 2018 and before 18 June 2018 or (2) 6 month immediately before the nomination application is lodged for a nomination application lodged on or after 18 June 2018. More specific requirements also have been introduced. |
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(3) Market Rate |
The nominator was required to provide evidence of how the terms and conditions of employment that will apply to the nominee are at least as favourable as those that apply to Australian employees at that location.
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Previous phrase has been replaced with a defined Annual Market Salary Rate (AMSR). Method for determining the AMSR where an Australian worker is performing equivalent work to be (1) an existing Fair Work Instrument, State industrial instrument or transitional instrument or (2) Where there is no instrument, determined by reference to relevant employment documents of the Australian employee. Where no Australian worker is performing equivalent work (1) an existing Fair Work Instrument, State industrial instrument or transitional instrument or (2) If no instrument exists, then AMSR must be determined by reference to relevant information including: (a) information published on the Australian Government’s Job Outlook website; (b) job advertisements from a national recruitment website or national print media that are in English and specify the salary arrangements for the advertised position; (c) written advice from registered employer associations and/or unions; (d) remuneration surveys generated across the relevant industry by a reputable organisation or body |
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(4) Occupation lists |
Following the April 2017 reforms of the 457 visa, the visa applicant must nominate a position on either the STSOL or the MLTSSL. |
Occupation lists carried over with certain occupations being available in regional areas. Occupation list applies at date of lodgement of the nomination. |
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(5) Genuineness |
The Minister must be satisfied that the position associated with the nominated occupation is genuine. |
The Minister must be satisfied that the position associated with the nominated occupation is genuine and a full-time position. |
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(6) Occupation change |
A new 457 nomination was required nominating the new occupation. |
New TSS nomination AND visa required |
Visa Applications
Prior (457) |
Current (TSS) |
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(1) Cost (visa only) |
Main applicant: $1,080.00
Over-18 dependents: $1,080.00 Under-18 dependents: $270.00 |
Short-term stream Main applicant: $1,150 Over-18 dependents: $1,150 Under-18 dependents: $290 Long-term stream Main applicant: $2,400 Over-18 dependents: $2,400 Under-18 dependents: $600 |
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(2) Visa applicant must hold at time of lodgement (if in Australia) |
Any (including no visa if Schedule 3 criteria were met) |
A substantive visa, or a Bridging Visa A, B or C. |
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(3) Overseas Business Sponsor (establishing Australian entity) |
Departmental policy preferred that 457 visa holders sponsored by an overseas business sponsor (OBS) should transfer to Australian entity as soon as possible. |
Regulations confirm prior policy position – individual sponsored by OBS should transfer employment to Australian entity once it has obtained a Standard Business Sponsorship (SBS) agreement. This transfer must occur as soon as practicable after the Australian entity commences active and lawful operation. |
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(4) Skills assessment |
Where a skills assessment is mandated by Departmental policy, the individual should make arrangements to obtain a skills assessment unless exempt. |
Where a skills assessment is mandated by legislative instrument, the applicant must have such an assessment or make arrangements to have their skills assessed at time of lodgement. |
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(5) Prior work experience required |
N/A – unless mandated by nominated ANZSCO occupation |
All TSS visa applicants must demonstrate at least two years of relevant work experience in their nominated occupation (or in a related field). |
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(6) Streams / occupation lists |
No streams applicable. |
Three streams introduced: · Short-term stream – for those nominating occupations on the short-term skilled occupation list (STSOL); · Medium-term stream – for those nominating occupations on the medium to long term strategic skills list (MLTSSL); and · Labour agreement stream – for those with approved labour agreements. |
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(7) English |
Unless exempt the primary applicant demonstrates an IELTS with an overall score of at least 5.0 and at least 4.5 in each of the four components (or equivalent English test result). |
Unless exempt the primary applicant demonstrates: · Medium-term stream – IELTS with an overall score of at least 5 and at least 5 in each of the four components (or equivalent English result); · Short-term stream – IELTS with an overall score of at least 5 and at least 4.5 in each of the four components (or equivalent English result). |
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(8) Genuine Temporary Entrant |
N/A |
Applicants under the short-term stream must demonstrate that they intend to genuinely stay in Australia temporarily (having regard to their circumstances, immigration history and any other relevant matter). |
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(9) Health |
Visa applicants must meet certain health criteria or the nominator provide an undertaking to meet all associated costs relating to relevant disease/condition |
Visa applicants must meet certain health criteria or have a waiver applied in their favour. |
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(10) Character |
Character requirements must be met.
Police clearances must be provided for every country that each visa applicant has resided in for 12 months or more cumulatively over the past 10 years. |
Character requirements must be met. Police clearance requirement remains. However, applicants sponsored by an accredited sponsor may attach a reference from their sponsor confirming that they are of good character as an alternative to providing police clearances from other countries other than Australia. Australian Federal Police clearance must still be provided if required however. |
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(11) Visa duration |
Where occupation nominated is on:
· STSOL – visa valid for two years; · MLTSSL – visa valid for 4 years. |
Where visa is applied for under: · “short-term” stream – visa valid for two years; · “long-term” stream – visa valid for four years. |
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(12) Visa conditions (in relation to work) |
Primary applicant must satisfy condition 8107 which states that the holder must (amongst other things):
– Must only work in the occupation listed in their most recently approved nomination; – Only work in a position in the business of their sponsoring employer (or associated entity where sponsor is not an OBS); and – Not cease employment for more than 60 consecutive days. |
Primary applicant must satisfy condition 8607 which states that the holder must (amongst other things): – Work only in the occupation (the nominated occupation) nominated by the nomination for the most recent Subclass 482 visa granted to the holder; – Work only in a position in the person’s business (or an associated entity where sponsor is not an OBS); – Not cease employment for more than 60 consecutive days. |
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(13) Renewability |
Renewed indefinitely as long as applicant continued to meet key criteria. |
Long-term stream applicants may be renewed indefinitely provided applicant continued to meet key criteria. TSS visa holders with an occupation on the STSOL can have their visa renewed onshore once. They must be offshore to lodge a third application and satisfy the “genuine temporary entry” criteria (see above). |
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(14) Occupation change |
A new 457 nomination was required nominating the new occupation. |
New TSS nomination AND visa required |
Note that the above is a summary only. Please seek advice for your specific circumstances for a proper assessment.
Analysis
Since the April 2017 announcements by the government, the initially proposed changes have been gradually rolled out. There has been relatively consistent information releases regarding what to expect and the implemented changes more or less resemble the announcements made by the government.
Some of these changes simply represented the codification of previous Departmental policy into the regulations (i.e. made into law instead of policy).
A significant change to the nomination criteria is the requirement that all occupations are now subject to Labour Market Testing (unless subject to international trade obligations). Businesses should be advertising for positions they intend to sponsor and keeping records of this. The TSS visa is also now only available to full-time positions.
On the visa side of things, the more significant changes include:
- the two year work experience requirement – this requirement effectively excludes recent graduates or individuals who have not previously worked in a particular industry before (and have no relevant work experience);
- accredited sponsors being able to ‘attest’ to an individual’s character which removes a significant administrative burden on certain visa applicants. Keep an eye on this space as the implications for companies who make such an attestation and are later found to be incorrect have yet to be released;
- health examinations – instead of putting the onus on employers to cover health costs which could be incurred by the visa applicant, applicants now need to demonstrate that a health waiver should be exercised in their favour. While this eases the burden on employers, it will likely result in increased processing times for those with health conditions as they make submissions as to why the waivers should be applied in their favour and these submissions be considered. We’d expect an increase in the number of visa refusals on this basis;
- lodgement fees increase – particularly when considered with the introduction of the training levy, the significant increase in lodgement fees is likely to prevent a number of small businesses from pursuing this visa.
Since the announcement of the reforms, the number of 457 visa grants have decreased significantly. The implementation of the TSS visa and the more stringent requirements (coupled with the increased costs) are likely to further drive down visa grants.
Other considerations
Further changes also took effect with respect of employer-sponsored permanent resident visa options (such as the Employer Nomination Scheme Subclass 186 visa), which you can read more about here.
On 19 March 2018, the government also announced a new visa scheme known as a “Global Talent Scheme” to attract highly skilled global talent to Australia. This visa will be piloted for 12 months from 1 July of this year and is aimed at assisting established businesses and certain start-ups. You can read our take on this new category here.
Next Steps
If you’re a current or prospective 457/TSS visa holder seeking clarification about these changes, we’d love to put your mind at ease. Contact us by email at [email protected] or phone +61 3 9016 0484 to obtain further guidance.
