On 18 April 2017, the Australian Government announced sweeping changes to employer sponsored skilled migration visas.

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While the most dramatic change is undoubtedly the abolition of subclass 457 visas in favor of the new Temporary Skills Shortage visa (TSS visa), the Government has flagged a number of significant changes to be made to employer sponsored work visas (including permanent residency visas) in the next 12 months with some changes taking effect as quickly as 19 April 2017.

What do employers need to know now?

Current subclass 457 visas will continue to remain in effect, but applications for new 457 visas lodged before 18 April 2017 and not yet determined may be affected by these changes. Applications lodged for occupations that are no longer eligible for subclass 457 visas can be withdrawn with application fees refunded.

Employers with plans to sponsor employees on 457 visas in the immediate future should ensure that the relevant occupation is on the newly issued Short-term Skilled Occupations List (STSOL) or Medium and Long-term Strategic Skills List (MLTSSL) and that the occupation is not subject to a caveat restricting its use for the 457 programme.

From March 2018, the 457 visa will no longer be available. Employers will be able to sponsor eligible skilled employees to work temporarily in Australia under the new TSS visa.

What is happening when?

Changes to Subclass 457 temporary skilled work visas Changes to employer nominated permanent residency visas
  • Introduction of STSOL and MLTSSL, removing 216 occupations from the current list of occupations able to be sponsored for 457 visas and placing caveats on 59 other occupations.
  • STSOL to be reviewed every 6 months.
  • Maximum duration of 457 visas issued for occupations on the STSOL will be 2 years.
  • 457 visas issued for occupations on the MLTSSL remains 4 years.
  • Visa applicants' occupations must be on the STSOL or MLTSSL to be eligible to apply for employer sponsored permanent residency.
Changes to Subclass 457 temporary skilled work visas Changes to employer nominated permanent residency visas
  • STSOL and MLTSSL to be reviewed further.
  • Police checks mandatory for all 457 visa applicants.
  • Abolition of current salary exemption to the English language requirement which exempts applicants whose salary is over AUD 96,400 from the requirement to demonstrate proficiency in English to a requisite standard.
  • Changes to policies around training benchmark requirement.
  • Applicants must have an International English Language Testing System or equivalent test score of 6 in each component (currently unclear whether current exemptions to the English language requirement will continue to apply).
  • Direct Entry applicants must be under the age of 45 at the time of application (currently 50).
Changes to Subclass 457 temporary skilled work visas Changes to employer nominated permanent residency visas
  • The Department of Immigration and Border Protection (DIBP) will collect tax file numbers for all visa holders and match data with Australian Tax office records to confirm salaries paid to visa holders.
  • The DIBP will publish details relating to sponsors who are sanctioned for failing to meet their obligations under migration legislation.
Changes to Subclass 457 temporary skilled work visas Changes to employer nominated permanent residency visas
  • 457 visa abolished and replaced with the TSS visa.
  • Applicants' occupations must be on the MLTSSL to apply for employer sponsored permanent residency.
  • Applicants must have at least 3 years' relevant work experience in the nominated occupation.
  • All applicants must be under the age of 45 at the time of application.
  • 457 visa holders eligible to apply after they have worked in the same occupation with their nominating employer for 3 years (currently 2).
  • Changes to requirement for employers to contribute to training Australian workers.

How will the TSS visa differ from the current 457 visa?

The TSS visa will be made up of 2 streams, with the following criteria and restrictions to apply:

Short-term stream Long-term stream Both streams
  • For occupations on the STSOL.
  • Granted for a maximum term of 2 years.
  • Visa can be renewed onshore once only.
  • Applicant must demonstrate that they genuinely intend to only stay in Australia temporarily.
  • No permanent residency pathway.
  • Applicants must have an International English Language Testing System or equivalent test score of 5, with a minimum score of 4.5 in each component (currently unclear whether current exemptions to the English language requirement will continue to apply).
  • Occupation must be on the MLTSSL.
  • Granted for a maximum of 4 years.
  • Can be renewed onshore.
  • Permanent residency pathway for holders after 3 years.
  • Applicants must have an International English Language Testing System or equivalent test score of 6 in each component (currently unclear whether current exemptions to the English language requirement will continue to apply).
  • All applicants must have 2 years' relevant work experience (recent graduates not eligible).
  • Labor market testing will be mandatory - employers will be required to advertise the position locally to "test" whether there are suitability qualified Australian citizens or permanent residents who are available to fill the position before sponsoring a TSS visa.
  • Mandatory police checks for all applicants.
  • Employers must meet a non-discriminatory workforce test.
  • Employers must meet requirement to contribute towards Australian workers (to be strengthened from current requirements).

It appears that many of the new details of the scheme are still to be determined. In particular, it's unclear at this stage what is envisaged by mandatory labor market testing, and what the strengthened training requirement will look like. The Government has advised that detailed policies for these requirements will be finalized and announced in the weeks and months to come.

What occupations have been affected?

Over 200 occupations have been cut from the occupation lists, including:

  • Human resource adviser
  • Building and engineering technician
  • ICT support and test engineers
  • ICT support technicians
  • Electronic engineering technician
  • Telecommunications technician

Over 50 occupations are now subject to caveats, restricting the circumstances in which applicants can be sponsored for visas to work in those positions. While further details are yet to be released, the caveats may relate to required work experience for the occupation, may provide that the occupation can only be sponsored for a 457 visa if located in a regional area, or may place occupation specific restrictions on when visas can be sponsored for these roles.

Occupations subject to caveats include:

  • Managing director
  • Corporate general manager
  • Corporate services manager
  • Customer services manager
  • Management consultant
  • Marketing specialist
  • Sales and marketing manager