On 9 May 2018 Bill’s establishing the Skilling Australians Fund (SAF) and tightening existing labour market test (LMT) criteria were passed in Parliament. Although a commencement date for the new legislation has not yet been determined, the changes are expected to come into effect in June 2018.
Skilling Australian Fund Levy Legislation
The Bill to establish the SAF Levy passed parliament on 9 May 2018. A date for the commencement of the legislation has not yet been determined but is expected to occur in June 2018.
When will it need to be paid?
The SAF levy will only be required to be paid in relation to any ENS, RSMS or TSS nominations lodged on or after the date of implementation of the levy. However, this will include TSS nominations lodged because circumstances change (eg subclass 457 visa holder wants to change employers). The levy is to be payable in full at the time the worker is nominated.
How much is the levy?
The amount of the levy will depend on the size of the business.
Business Size |
TSS visa |
ENS / RSMS visa |
| Small (annual turnover less than $10 million) | $1200 per year or part thereof | $3000 one-off |
| Other businesses | $1800 per year or part thereof | $5000 one-off |
Refund provisions
Fortunately for businesses, refund provisions for the upcoming SAF Levy have been detailed in the passed Bill. The refund provisions include:
- where a TSS nomination application was refused because the employer’s sponsorship application was refused;
- the employer’s sponsorship application is approved but the employee’s subsequent TSS visa application is refused on health or character grounds;
- the sponsorship and TSS visa applications are approved, but the TSS visa holder does not commence work with the employer;
- a TSS visa holder leaves their employer within the first 12 months of employment. This will only be applicable in situations where the visa grant period was for more than 12 months. Refunds will only be available for the unused full years of the levy.
These changes (particularly point 4) protect the business in cases of unexpected circumstances of the employee.
Labour Market Testing Legislation
Mandatory LMT was introduced in March 2018 as part of the TSS visa implementation (see here). A date for the commencement of the legislation has not yet been determined but it is expected to come into force in June 2018.
The Department currently applies policy which mandates the requirements regarding LMT:
- must have been done in the 12 months prior to the nomination application
- must have run for 21 days in at least two different posts in national media or on a national recruitment website
- must include (1) the job title or position description (2) the name of the employer or recruitment agency (3) an indication of salary
The new Bill introduces a legislative framework for the existing LMT policy but has two important amendments:
- that the advertising must have been done in the 4 months prior to the nomination application; and
- that the advertising must have run for at least four weeks.
These changes increase the burden on employers to ensure quality LMT has been undertaken.
Recommendations
Due to the substantial increase in expenditure for businesses once the SAF levy comes into effect (especially for larger businesses with over $10 mil turnover) priority should be made to lodge all eligible applications as soon as possible.
Although LMT changes have not yet come into effect, businesses should amend their internal policy to have LMT for 4 weeks in the last 4 months for all new hires.
Any questions?
If you are a business or employee concerned about how the LMT and SAF levy will affect you, please contact us directly on (+61 3 9016 0484) or by mail ([email protected]).
