This year the Coalition government instituted numerous controversial changes to Australia’s immigration system, with the largest being its decision to abolish the long-standing 457 skilled visa worker program.
The government’s move—which was announced with no warning—has thrown the Australian business community into considerable chaos, with multiple industries being reliant on a constant influx of foreign labour.
The situation has been further exacerbated by the Department of Immigration’s failure to provide adequate information about the changes detailed in the legislation, leaving many employers in the dark in regards to managing visa compliance.
In March 2018, many of the government’s new policies will come into full effect, including the replacement of the 457 program with the new TSS visa system. Significant changes to the training fund levy and the employer sponsored permanent residency visa will also be put in place.
The TSS Visa Program
Starting from March 2018 the subclass 457 Temporary Work (Skilled) Visa will be officially disbanded and replaced with the new Temporary Skill Shortage (TSS) Visa.
The TSS visa program will consist of two streams, a Short-Term visa which will allow a stay in Australia of up to two years, and a Medium-Term visa lasting four years.
New features of the TSS visa will include:
A more restricted skilled occupation list
The requirement that applicants have two years prior experience in their intended role
Employers are now required to pay the Australian market salary rate to foreign employees, as well as meeting the Temporary Skilled Migration Income Threshold (TSMIT)
Mandatory labour market testing
Eligibility for onshore renewal and permanent residency after three years under the Medium-Term stream
A workforce test to ensure that employers are not discriminating against Australian workers by hiring temporary foreign nationals
A new requirement to contribute to the Skilling Australians Fund
The mandatory collection of Tax File Numbers and penal clearance certificates to the Department of Immigration and Border Protection
The government will also be replacing the currently in place Training Benchmarks system in favour the new Training Fund Levy.
Businesses with an annual turnover of less than $10 million will now be subject to a $1200 training fund levy per year to make use of TSS visa program, while companies with a yearly turnover that is equal to or exceeding $10 million will instead have to pay a higher annual fee of $1800.
The training levy covering the entire visa period must also be paid to the Department of Immigration upfront. This means that the cost of hiring a foreign worker on a Medium-Term visa can potentially cost up to $7200.
Companies that rely on the skilled visa program are likely to be hit hardest by the new changes, which will see them facing significantly higher costs for hiring foreign workers.
Employer Sponsored Permanent Residency
While it was recently announced that foreign national workers who were already in the country on an existing 457 visa will still retain eligibility to apply for the employer sponsored permanent residency visa, detailed information regarding transitional arrangements has yet to be provided by the Department of Immigration.
Other changes to the Employer Sponsored Permanent Residency Program will also include:
The eligibility period to transition to permanent residency status will be raised from two to three years.
The newly condensed Skilled Occupation List (SOL)—which is now known as the Medium and Long-term Strategic Skills List (MLTSSL)—will now apply to both the Employer Nominated and Regional Sponsored Permanent Residency Visa program
Applicants must have at least three years experience in their intended occupation and be under the age of 45
Employers who wish to nominate a worker for the Employer Nominated or Regional Sponsored Permanent Residency Visa will be required to make an upfront contribution between $3000 and $5000 to the Skilling Australians Fund
The government has also introduced a new one-off payment of $3000 for every employee you wish to sponsor under the permanent residency (subclass 186) Employer Nomination visa, and the permanent (subclass 187) Regional Sponsored Migration visa program for businesses that have an annual turnover of less than $10 million.
Companies that exceed the $10 million threshold will be slugged with a much higher $5000 one-off fee for every employee being sponsored under the 186 and 187 visa.
Increased Processing Times
As time has gone on visa processing times have only continued to grow, which can present a major challenge for employers looking to staff their business by a specific deadline.
Given the likely influx of new applications in the lead up to—and continuing from—the launch of the TSS visa, these wait times seem unlikely to decrease.
According to the Department of Immigration 75% of applicants can expect to have their visa processed within five months, while 90% can expect by a response after ten months.
Although the government has claimed that visa processing times will not be significantly affected by the TSS visa’s launch, Absolute Immigration advises clients to ensure that the required documentation is organised and submitted to the Department of Immigration as soon as possible.
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