Immigration is a life-changing experience which bears many opportunities. Note – this article has since been revised and updated. See the most recent immigration updates here.
For those relocating to Australia, working and skilled visas (such as the 457, 186 and 187 visas) provided a pathway to work and eventually to obtain permanent residency.
And for companies looking to grow and unable to find the talent required locally, these visas provided the opportunity to hire qualified team members.
2017 has seen unprecedented changes made to the Employer Sponsorship program by Australia’s Department of Immigration (DIBP). In April, the federal government announced changes to the skilled migration program that will see the 457 visa scrapped. Many people who have made the move to set up life in Australia, and the businesses that have hired them, now face uncertainty.
With the first round of changes announced on the 19th of April, with further alterations made on 1st of July, the situation has become very complicated to plan for. Even today, the restructuring has not concluded—further changes are expected to occur in March of 2018.
These changes are far-reaching and will impact existing 457, 186 and 187 visa holders, as well as prospective visa holders. So, what does this all mean for employers and employees? Is it all doom & gloom?
To make the changes easier to grasp, let’s explore them in chronological order.
April 2017 Amendments
1. 457 visas have not been abolished yet.
They are in place until March 2018. After that, they will be replaced with a very similar visa called the Temporary Skilled Shortage (TSS) Visa.
2. The 2 new skilled occupations lists are in force.
One of the new lists is the “Medium and Long Term Strategic Skills List” (MLTSSL), which will replace the Skilled Occupations List (SOL). The other new list, “Short Term Skilled Occupations List” (STSOL), will replace the Consolidated Skilled Occupations List (CSOL). These new skilled occupation lists will apply to pending applications, as well as completely new applications.
It is important to note that there are different versions of the occupation lists, depending on the type of visa in question (subclass 457, 186 or 187 visa). These are listed in separate Legislative Instruments. This point of difference makes vigilance highly important—applicants need to ensure they are getting the right advice (not only when applying for a 457 temporary residency, but also when applying for visa subclass 186 or 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 which you and/or your sponsor are required to meet. This is incredibly important to note, as a number of factors can preclude an employer from sponsoring someone on a 457 visa. These factors may include 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.
Some of the occupations affected by the caveats include General Managers, Sales & Marketing Managers, Graphic Designers, Accountants, Café and Restaurant Managers, Cooks and Chefs, among many others. Again, make sure you get the right advice so you can plan for a successful application.
4. The duration of your visa will be determined by what list your occupation appears on.
If your occupation is on the MLTSSL, then your 457 visa will be granted for 4 years. If your occupation is on the STSOL list, then 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, then you cannot be sponsored for permanent residency by your employer.
Now, let’s now take a look at the changes which came into force in July.
July 1st 2017 Amendments
1. New English language requirements
From July 1st 2017, the English language requirements for both Direct Entry and 457 Transition Stream are now IELTS Competent or the equivalent, with a small number of exemptions.
2. The English language test is no longer exempt for certain salary packages.
Under the July changes, even those with a salary + superannuation package higher than $96,400 will be required to take the English language test (except for applicants already working for an associated entity of the sponsor overseas).
3. Police checks will be mandatory for 457 visas.
This will cause significant delays when applying from countries such as Canada or the US, where the process is lengthy and time-consuming.
4. The occupation lists will be reviewed every 6 months, starting from the 1st of July 2017.
When the review took place in July, additional occupations were removed from the Skilled Occupations Lists, and some other occupations were moved between the lists. What was the case in June may not be the case now. As such, it is important to have the up-to-date information.
5. DIBP has provided more clarification surrounding training benchmarks requirements.
One beneficial aspect is that employers can choose the previous 12 months before the application, or the last financial year. However, some clarifications have introduced tighter requirements for training benchmarks, making it more challenging for employers to meet these benchmarks. For example, the DIBP has outlined that training for employees will only be recognised if “training” is the sole purpose of the role. In addition, induction training can no longer be claimed as part of training expenditure.
5. DIBP has also provided further clarification of what constitutes “payroll”.
This clarification assists employers in meeting training benchmarks. Training Benchmarks A and B require that either 1 % or 2% of payroll is spent on training.
6. New age restrictions.
Under the new changes, applicants must be under 45 years if applying through the Direct Entry Stream of visa subclasses 186 or 187. When applying for the 457 Transition Stream, applicants must be under 50 years of age. The applicant’s age will be considered as the age at the time of application. There though still some age exemptions for certain applicants, but these are limited. NZ citizens are exempted.
January/February 2018 Update
1. Skills Occupation Lists Go Unchanged
In November 2017, The Department of Employment launched a Traffic Light Bulletin which allowed stakeholders to provide feedback on the possible changes to the skilled migration occupation lists.
After taking this feedback into account, the department decided against scheduling more proposed changes to the Medium and Long-Term Strategic Skills List.
In their own words, the department stated, “There were substantial changes to the skilled migration occupation lists in April and July 2017. Therefore, the Government has prioritised continuity and stability.”
2. Immigration and National Security Have Formed Closer Ties
The Home Affairs Portfolio was created on December 20, 2017, which has brought together the likes of Australia’s federal law enforcement as well as immigration and border-related functions. This has seen the Department of Home Affairs encompass the Department of Immigration and Border Protection.
As such, Australian immigration has closer ties with natural security agencies, which may be called upon when screening new applicants.
How to Prepare for Future Changes
Although the changes for March 2018 have not yet been legislated for, I am able to give some predictions about how they are likely to impact employees and employers.
1. From March 2018, Labour Market Testing will be mandatory unless international obligation applies.
This change is intended to be a quick and temporary solution to address skill shortages in Australia. At present, we don’t know what this is going to look like. In my opinion, this is a cumbersome process which will slow down the visa application.
2. At least 2 years of relevant work experience will be required from all applicants.
This will have a big impact on recent graduates applying for the 457 visa, as they simply won’t be able to meet this requirement.
3. You will be required to have more experience to apply for the 457 Transition Stream.
From March 2018, applicants under the 457 Transition Stream of visa subclass 186 or 187 will need to have been employed by their current employer for 3 years (an increase of the previous requirement of 2 years).
4. Changes to eligibility for permanent residency.
Occupations on the Short Term Skilled Occupations List (STSOL) will NOT be eligible for permanent residency sponsorship. Moreover, from March 2018, you will need at least 3 years relevant work experience when applying for permanent residency.
A Few Updates To Be Aware Of…
Since originally publishing this article, there has been an increase in the processing times. What was an 8 week processing period has now increased to a processing period of 4 months. This means that the 457 Visa will no longer be a quick solution for Australian employers to fill skills gaps.
186 Visa Updates
Also after publishing this article, the 186 visa has undergone more changes (in March 2018).
The new skilled occupation list has been published, which specifies the 208 eligible occupations for the Medium and Long-term Strategic Skills List.
In order to secure a 186 visa, applicants must be nominated in one of these skilled occupations unless separate arrangements are in place under a labour agreement or transitional arrangements apply in relation to a Temporary Residence Transition (TRT) stream nomination.
Work experience related caveats have been removed.
In my opinion…
The manner of how these changes were announced, as well as their impact, is disappointing to say the least. Whilst I have no problem with prioritising the needs of Australia and its people, I also believe that the national value of 457 visa holders needs to be recognised and treated accordingly.
Put simply, local talent doesn’t possess all the skills needed in Australia, meaning that many businesses rely on 457 visa holders to ensure that Australia continues to compete on a global level. This means that 457 visa holders’ contribution is immensely important—especially for the Australian economy and global competitiveness.
The way in which the changes have been announced and implemented is also another cause of great disappointment. The implementation prevented certain groups from politically resisting the change (we all know that 457 visa holders can’t vote!).
“Many businesses rely on 457 visa holders to ensure that Australia continues to compete on a global level.”
In addition, the lack of consultation by the DIBP seems counter-productive. Powerful sectors with enough influence to lobby can resist certain aspect of the changes, which seems unfair for smaller sectors who remain voiceless. This becomes apparent when we consider occupations on the Short Term Skilled Occupations List (STSOL) being moved to the Medium and Long Term Strategic Skills List (MLTSSL) – something that should have been finalised prior to announcing the changes.
This becomes apparent when we consider occupations on the Short Term Skilled Occupations List (STSOL) being moved to the Medium and Long Term Strategic Skills List (MLTSSL) – something that should have been finalised prior to announcing the changes.
The slow drip of information and amendments has made things extremely uncertain for employers and visa holders alike – and we all know businesses like 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.