The 457 visas are abolished as of 18 March 2018 and are being replaced by the Temporary Skills Shortage (TSS) Subclass 482 visa.
This will be a change which affects all employers who sponsor staff, and the changes to the legislation are extensive.
We have summarised the information which is most important for employers to know about the new TSS visa.
When do the Changes Come Into Effect?
The changes are effective on 18 March 2018. After this date:
- It is no longer possible to apply for a 457 visa;
- The TSS subclass visa replaces the 457 visa
Changes also apply to permanent employer-sponsored ENS and RSMS visas lodged on or after this date.
What Happens if I Have an Outstanding 457 Application as of 18 March 2018?
457 visa applications lodged before 18 March 2018 will continue to be processed. They will be assessed as per the Migration Regulations which applied prior to this date. If a 457 nomination is lodged prior to 18 March, but there is no linked 457 lodged by this date, then the nomination will no longer be processed and a refund may be paid. How are the Requirements for a TSS Visa Different to a 457 Visa? Changes have been made to the following requirements
The TSS has 3 different streams – the Short Term, Medium Term, and Labour Agreement streams
- Work Experience
- English Language Ability
- Health Requirement
- Occupations List
- Work Conditions for the Visa
- Visa Validity Period for Adult Children
- Higher Visa Application Fees
- Training requirement for sponsorship approval
- Employer Sponsorship validity and renewal process
- Market Rate Salary
- Labour Market Testing is required in most cases
- Various Nomination Requirements
What Are the TSS Streams?
Employers must nominate one of the three TSS application streams. These are as follows:
1. Short Term Stream
For the short term stream:
- The nominated occupation must be on the STSOL (Short Term Skilled Occupations List)
- Applicants must show that they are Genuine Temporary Entrants
- The visa is valid for either 1 or 2 years (unless an International Trade Obligation applies)
- The visa can only be renewed onshore once
2. Medium Term Stream
For the Medium Term Stream:
- The occupation must be on the MLTSSL (Medium and Long Term Strategic Skills List)
- A higher English language requirement applies compared to the Short Term Stream
- The visa can be valid for 1, 2, 3 or 4 years
- The visa can be renewed without limitation and applicants may be eligible for permanent employer-sponsored options
3. Labour Agreement Stream
This stream is for employers who have negotiated a labor agreement with the Australian Government.
What is the Work Experience Requirement for the TSS Visa?
To be eligible for a TSS visa, the applicant must have at least 2 years of work experience. This would need to be in the nominated occupation or “related field”. It was possible to apply for a 457 visa with no work experience, providing you hold a relevant qualification.
This would mean that people without work experience would not be eligible for a TSS visa – for example international students.
There does seem to be some flexibility in considering work experience which is not necessarily in the nominated occupation but in a related field.
If sponsored under a Labour Agreement, a waiver of the 2-year work experience requirement is possible.
What are the English Requirements for the TSS Visa?
For the Short Term Stream, the English requirements are the same as for the 457 visa – that is an average of 5 in the IELTS, with no scores under 4.5 in any of the 4 bands. A range of alternative English tests is also accepted as per the 457 visas.
For the Long Term Stream, the English Requirement is higher. A minimum of 5 in each band of IELTS is equivalent, and an average of 5 is not sufficient.
Similar to the 457 visas, exemptions from English language testing are available for:
- Passport holders from the UK, Ireland, USA, Canada, and New Zealand
- People who have completed at least 5 years of study in English medium
- Intra-company transfers where the base salary is at least $96,400
- Diplomatic/consular appointments
For the Labour Agreement stream, the requirement is less strict – applicants must show they have the English language skills to perform the occupation, without reference to formal English testing.
What is the Health Requirement for the TSS Visa?
To qualify for a 457 or TSS visa, applicants must, in general, to show they do not have any medical conditions which are:
- of public health concern; or
- would result in a significant cost to the Australian community; or
- would result in the use of scarce medical or community services
The 457 visa was subject to health criterion 4006A. This meant that if an applicant has a medical condition, they could still be granted if the employer signed an undertaking to meet the necessary costs. The issue with this was that employees had to disclose the medical condition to the employer to be granted the visa.
The TSS visa is subject to health criterion 4007. This means that if the applicant has a health condition, they can still be granted if the cost to the community is “not undue” via a health waiver. The applicant’s personal factors can be taken into account. Examples include:
- pre-existing health insurance
- financial capacity
- the ability of relatives to provide the necessary care
There is no requirement that the employer signs an undertaking, meaning that the employee does not need to disclose their condition.
Have there Been Any Changes to the Skilled Occupations Lists?
The structure of the list for the TSS visa has changed – we now have the following classifications:
- MLTSSL: the short list of most in-demand occupations. Eligible for 4-year visas, and for permanent residence options
- STSOL: a longer list of occupations which are eligible for a TSS visa valid for up to 2 years
- Regional Occupations: list of occupations which are eligible for a TSS only if the position is in a regional postcode. Also eligible for the permanent RSMS visa
There have been no changes to the MLTSSL or STSOL, but occupations have been added to the Regional list. This means that some occupations which were not eligible for 457 visas may be eligible for a TSS visa if the position is located in a regional area.
What is the Work Restriction on a TSS visa?
TSS Visas are subject to condition 8607. This is similar to the condition which applied to the 457 visas and broadly speaking is as follows:
- The employee can only work for the nominating employer, in the occupation in which they were sponsored
- If registration, licensing or professional membership is required to work in the position, the applicant holds this
- The holder must commence work within 90 days of grant or arrival in Australia; and
- The holder is subject to cancellation if they cease work for more than 60 days
I Have an Adult Child – How Long will the TSS Visa be Valid for?
If you are including a child in your TSS application, the visa will only be valid until the child’s 23rd birthday.
For a 457 visa, the visa could in some case be valid after the child’s 23rd birthday.
What are the Fees for a TSS Visa?
The application fee depends on which stream is being applied for:
- Short Term Stream: $1,150
- Medium-Term Stream: $2,400
- Labour Agreement Stream: $2,400
The application fee for a 457 visa is $1,080, so this represents an increase in application fees. There are no increases to the nomination or sponsorship application fees at this stage.
The Government has also announced that a Training Levy will apply to TSS nominations. The legislation for this has not yet passed, but the following amounts are likely to apply:
- Large organization (over $10 million turnovers): $1,800 per year of visa validity
- Smaller organizations: $1,200 per year
When the training levy is introduced, this will significantly increase the cost for employers of obtaining a TSS visa.
Can I Use a 457 Sponsorship Approval for the TSS Program?
Yes – you can use an existing Standard Business Sponsorship to apply for TSS Nominations and Visa Applications.
What is the Training Requirement for Approval as a Business Sponsor?
Sponsors no longer required to provide evidence of training of Australians in the business to be approved as a sponsor. This is because of the expected introduction of the Training Levy in the near future to replace the training obligation.
However, the sponsorship obligation to provide training will continue for sponsors who have already been approved.
Training will also be relevant when applying for permanent Employer Nomination Scheme visas
How Long is a TSS Sponsorship Approval Valid for?
When a Standard Business Sponsorship is granted after 18 March 2018, it will be valid for a period of 5 years in most cases. Previously, it would be valid for a lesser amount of time if the business was a start-up.
How is the Sponsorship Renewal Process Changing?
For sponsors operating in Australia, a simpler streamlined process of renewing the sponsorship is available after 18 March.
For overseas business sponsors, a new sponsorship application must be made each time, and the streamlined process is not available.
What are the Labour Market Testing Requirements for the TSS Visa?
Labour Market Testing requires the employer to show that it has not been possible to source an employee from the Australian labor market before sponsoring for a visa. Generally, this requires providing evidence that the position has been advertised and that no suitable candidates were available.
For the 457 visas, most management, professional and associate professional occupations were exempt from Labour Market Testing.
For the TSS Visa, Labour Market Testing is required in most cases. The main exception is where an International Trade Obligation applies.
Labour Market Testing must be conducted in the occupation within the last 12 months to meet TSS requirements – similar to the 457 requirements. From 18 June 2018, this must have been conducted within the last 6 months before application.
How is Market Rate Salary Assessed for the TSS Visa?
Compared to the 457 market rate salary requirement, there are detail changes and differences in terminology but the overall effect will be similar for most employers.
It is expected that a minimum salary will continue to be specified for some occupations by caveats on the Skilled Occupations List instruments.
The method of assessing market rate salary has been revised for the TSS Visa as follows:
- If the applicant’s earnings are at least $250,000, the requirement is met
- The Annual Market Salary Rate (AMSR) for the position must be at least TSMIT (Temporary Skilled Migration Income Threshold). The TSMIT is unchanged at $53,900
- The nominee’s earnings must be at least AMSR
- The nominee’s earnings must be at least TSMIT
- Non-monetary benefits are excluded from the above considerations unless the Minister considers it reasonable to include them (eg where an accommodation allowance is provided and this is necessary due to a remote location for the position)
- If the Minister has information that the employment conditions for the TSS applicant are less favorable that would apply to an Australian, then the application can be refused
The Annual Market Salary Rate (AMSR) is determined based on the following process: 1. If an Australian permanent resident or citizen is working in an equivalent position in the same workplace:
- If an industrial instrument applies to the Australian, the earnings as specified in the instrument
- Otherwise, payslips or an employment contract for the Australian
2. If there is no Australian in an equivalent position:
- If an industrial instrument would apply, the earnings as specified by the instrument
- Information from Job Outlook, remuneration surveys, advice from employer associations or unions, job advertisements.
If relying on job advertisements to establish AMSR, they must be:
- From a national recruitment website or from national print media
- In English
- Specify the salary arrangements for the position
What are the Changes to Nomination Requirements?
A large number of detail changes have been made to the nomination process. Some of the more important ones include:
- For the 457 visas, whether the occupation was on the approved list was a time of decision requirement for the nomination and visa. As a result, if the list changed during processing, an applicant could be disadvantaged. For the TSS visa, this is a time of application requirement
- The TSS will only be available for full-time positions. For the 457, part-time positions were possible, providing the base earnings were at least TSMIT
- The period of nomination must be specified and be exactly 1, 2, 3 or 4 years. We believe this is to facilitate payment of the training levy, which is based on how many years the TSS holder will be working in Australia
- Previously, the legislation did not make it clear whether an employee can pay nomination costs for a 457 visa. The new legislation specifically mentions that the sponsor must pay the nomination fees. This will be particularly significant when the Training Levy is introduced.
The TSS visa is similar in concept to the 457 visas but different in detail in a number of important ways. If you would like advice on applying for TSS visas for your staff, or how the changes will impact your business, please call our Corporate Hotline on + 61 4 0267 1354.
If you are a potential visa applicant, please book a consultation to discuss your visa options. This will include both employer-sponsored options and any independent or family-sponsored pathways you can consider.