457 Visas – What’s Happening?

Food for thought

2017 has seen unprecedented changes made to the Employer Sponsorship program by Australia’s Department of Immigration (DIBP). The 19th of April introduced the first round and more were made on 1 July 2017. Still more are scheduled for March 2018 as well. These changes are far reaching and some prospective as well as existing 457 visa holders will be very negatively affected by them. So, what does this all mean to employers and employees? Is it all doom & gloom?

Let’s run through the changes we know of so far starting with the April 2017 changes:

1. 457 visas have not been abolished. They are in place until March 2018. Then they will be replaced with a very similar style of visa called the Temporary Skilled Shortage Visa.
2. New skilled occupations lists are in force. These will apply to existing lodged but not yet decided applications as well as new applications. The 2 lists are the Medium and Long Term Strategic Skills List (MLTSSL) replacing the Skilled Occupations List (SOL) and the Short Term Skilled Occupations List (STSOL) replacing the Consolidated Skilled Occupations List (CSOL). It is very important to note that now there are different versions of the occupation lists depending on whether you are applying for a subclass 457 visa, a subclass 186 visa or a subclass 187. These are listed in separate Legislative Instruments. Applicants need to be very careful when applying and it makes getting the right advice even more important. This can affect planning for not only a 457 temporary residence application but also for an employer sponsored permanent residence application through visa subclass 186/187.
3. There are now 26 caveats affecting certain occupations. This means that even if your occupation is on the new occupation lists there is additional criteria you or your sponsor has to meet for you to be able to apply. This is incredibly important to confirm as factors such as the sales turnover of the employer, the salary offered, the location of the business, the number of employees in the business and the amount of work experience an applicant has can preclude an employer from sponsoring someone on a 457 visa. Examples of some occupations affected by the caveats are General Manager, Sales & Marketing Manager, Graphic Designer, Accountant, Café and Restaurant Manager, Cooks and Chefs and many others. Again, make sure you get the right advice so you can plan properly for a successful application.
4. If your occupation is on the MLTSSL your 457 visa will be granted for 4 years. If your occupation is on the STSOL your visa will be granted for 2 years with the option of 1 onshore renewal for a further 2 years.
5. Over 200 occupations have been removed from the lists. Many of these were rarely used, but if your occupation was removed you cannot be sponsored for permanent residence by your employer.

Let’s now take a look at the changes which came into force on 1 July 2017:

1. The English language test exemption for higher salary than $96,400 plus superanuation was removed.
   Police checks will be mandatory for 457 visas. This will cause significant delays when applying for countries such as Canada or the US where the process is slow.
2. The occupation lists will be reviewed every 6 months starting 1 July 2017. This has occurred. Some additional occupations were removed from the Skilled Occupations Lists and some were moved between the lists. What was the case in June may not be the case now so it is very important that you have the most up to date information.
3. More clarification was provided by DIBP as to what meets the training benchmarks. One good change made here is that employers can choose the previous 12months before the application or the last financial year. One clarification that will have a negative effect on employers is that the salary of an employee providing internal training for employees can only be counted if the SOLE role is to provide training. Also, induction training can no longer be claimed as part of your training expenditure.
4. DIBP has also provided further clarification of what constitutes “payroll” to assist employers to meet the training benchmarks. Training Benchmarks A and B requiring 2 or 1 % of payroll to be spend on training.

Although the changes coming in in March 2018 have not yet been legislated for I can tell you what we do now at this point.

1. From March 2018 Labour Market Testing will be mandatory unless international obligation applies. We don’t know yet what this is going to look like. In my opinion, this is a cumbersome process which will slow down the visa application of what is meant to be a quick temporary solution to skills shortages in Australia.
2. At least 2 years relevant work experience will be required from all applicants. This will have a big impact on recent student graduates applying for 457 visas as they simply won’t be able to meet this requirement.
3. Occupations on the Short Term Skilled Occupations List (STSOL) will NOT be able to be sponsored for permanent residence.

The manner of how these changes were announced as well as the effect of them is disappointing to say the least. Whilst I have no problem with putting Australia and Australian’s first I do think the valuable resource that 457 visa holders are needs to be acknowledged. We don’t have all the skills we need in Australia and many businesses rely on 457 visa holders. The contribution 457 visa holders make to our economy should also be acknowledged. This applies when holding a 457 visa and when they take out permanent residence. This seems like a politically motivated action and we all know 457 visa holders can’t vote! The lack of consultation by the DIBP seems counter – productive. We have already seen those sectors with enough influence to lobby the government being successful in having things changed. This is particularly so for occupations on the Short Term Skilled Occupations List (STSOL) being moved to the Medium and Long Term Strategic Skills List (MLTSSL). This seems unfair to smaller sectors and something that could have been conducted prior to announcing the changes. The confusion and slow drip of information and legislation amendments has made things extremely difficult & uncertain for employers and visa holders alike and we all know business likes certainty.

The good news is that we now have a much clearer picture of the changes and the chaos of April, May & June has subsided. The more complicated and ever changing framework means good advice is even more important now for both employers and visa applicants.

  If you have any questions or queries please email info@four-corners.com.au or call +61 2 8904 0100.