- Jenny Murphy MARN 0852535
How the changes impact your HR Strategy
Following the Australian Government’s recent announcements regarding the employer sponsored visa program, it is more important than ever to partner with a migration agency to assist in reviewing your HR strategy.
The Government has made several announcements regarding changes to be introduced over the next 12 months, however the legislation and policy is not yet drafted or available for the future changes. SCA Connect are able to guide you through what has already changed and what is proposed, whilst working with you to review the impact these may have on your recruitment and talent acquisition processes.
The changes impact both the temporary employer sponsored program (457 visa program) and the permanent employer sponsored visa program (Employer Nomination Scheme (ENS) – Subclass 186 and Regional Sponsored Migration Scheme (RSMS- Subclass 187).
CHANGES INTRODUCED ON 19TH APRIL 2017
457 Program
Changes to the occupation lists which resulted in 216 occupations being removed, and 59 occupations being restricted.
The occupation lists were renamed to the Short-term Skilled Occupation List (STSOL) and the Medium and Long Term Strategic Skills List (MLTSSL).
The maximum duration for 457 visas issued for occupations on the STSOL is two years. Occupations on the MLTSSL will continue to be issued for a maximum duration of four years.
Permanent Employment sponsored visa program
The new occupation lists are applicable to the employer sponsored visa programs. The MLTSSL is the applicable list for the direct entry stream.
WHAT DO THESE CHANGES MEAN FOR YOUR BUSINESS?
The changes to the 457 program impacted all applications lodged and not yet decided. In many instances this left employers and applicants without a visa option. The shorter visa validity has also seen applicants not proceed with roles they had previously accepted. This is understandable, especially when potential visa applicants are often the best and brightest in their field of expertise and already hold lucrative roles overseas, or have several international opportunities. Several companies also have their own internal policies regarding the relocation of employees, especially for intra company transfers, and the cost of relocating employees for a two year period is no longer an economically viable option.
The Government has shown little regard for the recruitment process and strategies companies implement, including the lead time and costs incurred. In several instances employers were in 3-6 month recruitment processes prior to lodging an application. In several industries there is a global talent shortage and the specific skill set is simply not available in Australia. Australian businesses are competing for the talent on a global scale, not just in Australia. At the same time, their home grown talent is also being attracted to pursue international opportunities. Businesses have usually made a significant investment in training their Australian employees. It is not just a matter of business providing more lucrative opportunities for Australians to retain the talent in Australia. Employees pursue international opportunities for a number of reasons, including wanting to experience a different life and culture, and develop further career opportunities.
On a positive note, the Government has begun undertaking stakeholder consultation following the announcements and many industries, organisations, and other impacted stakeholders have provided submissions which will hopefully have an impact on changes due for 1 July 2017.
The STSOL is due to be reviewed every 6 months and the MLTSSL every 12 months. The frequency of the lists being reviewed, and the current lengthy processing times, creates an era of uncertainty and a challenge for businesses to build a long term HR strategy for business growth and expansion.
PROPOSED CHANGES 1ST JULY 2017
457 Program
The STSOL and MLTSSL will be further reviewed.
The English language salary exemption threshold will be removed.
Police Certificates will become mandatory.
Policy settings about the training benchmarks will be made clearer.
Permanent Residency employer sponsored visa program
The STSOL and MLTSSL will be further reviewed.
English language requirements: A requirement of an International English Language Testing System (IELTS) (or equivalent test) score of 6 in each component.
A maximum age requirement of 45 at the time of application will apply to Direct Entry stream applicants. A maximum age requirement of 50 at the time of application will continue to apply to Temporary Residence Transition stream applicants.
WHAT DO THESE CHANGES MEAN FOR YOUR BUSINESS?
Hopefully changes to the STSOL and MLTSSL will include certain occupations removed in April being included on the lists again. The requirement of police clearance certificates will slow down the lodgement and processing of 457 applications. Police clearance certificates can take a considerable number of weeks or months to obtain from certain countries.
Currently there are age exemptions for permanent residency. It is not yet known if the age exemptions will remain. Several employees on the temporary employer sponsored visa program are over the age of 45. To reach the skill level and experience in their occupation has taken a number of years. They are often in key strategic roles in the business. Their skill and experience are often required by the business to strengthen the business and shape it for future growth and stability, with the end result being business growth and growth in employment of Australian residents and citizens.
A potential applicant at the age of 46 is still likely to have over 20 years of their working life remaining. This would seem a substantial time to still contribute to the workforce and the Australian economy and community.
PROPOSED CHANGED DECEMBER 2017
The Department of Immigration and Border Protection (the Department) will commence the collection of Tax File Numbers for 457 visa holders and permanent residency visa applications (and other employer sponsored migrants), and data will be matched with the Australian Tax Office’s records to ensure that visa holders are not paid less than their nominated salary.
DIBP will commence the publication of details relating to sponsors sanctioned for failing to meet their obligations under the Migration Regulation 1994 and related legislation
WHAT DO THESE CHANGES MEAN FOR YOUR BUSINESS?
For businesses that comply with the program, the December changes will be of little impact.
PROPOSED CHANGES MARCH 2018
457 Program
From March 2018 the Government wants to abolish the 457 program and replace it with the TSS visa. The TSS visa will be comprised of two streams:
Short Term Stream
Renewal: Capacity for visa renewal onshore once only.
Occupations:
For non-regional Australia, the STSOL will apply
For regional Australia, the STSOL will apply, with additional occupations available to support regional employers.
English language requirements: A requirement of an International English Language Testing System (IELTS) (or equivalent test) score of 5, with a minimum of 4.5 in each test component.
Genuine entry: A genuine temporary entrant requirement.
Medium Term Stream
Renewal: Capacity for visa renewal onshore and a permanent residence pathway after three years. –
Occupation lists:
For non-regional Australia - the MLTSSL will apply.
For regional Australia - the MLTSSL will apply, with additional occupations available to support regional employers. - English language requirements: a requirement of a minimum of IELTS 5 (or equivalent test) in each test component.
Eligibility criteria for both streams will include:
Work experience: at least two years’ work experience relevant to the particular occupation.
Labour market testing (LMT): LMT will be mandatory, unless an international obligation applies.
Minimum market salary rate: Employers must pay the Australian market salary rate and meet the Temporary Skilled Migration Income Threshold requirements.
Character: Mandatory police clearance certificates to be provided.
Workforce: A non-discriminatory workforce test to ensure employers are not actively discriminating against Australian workers.
Training requirement: Employers nominating a worker for a TSS visa will be required to pay a contribution to the Skilling Australians Fund. The contribution will be:
payable in full at the time the worker is nominated; $1200 per year or part year for small businesses (those with annual turnover of less than $10 million) and $1800 per year or part year for other businesses.
Permanent employer sponsored skilled visa program
Occupation lists: The MLTSSL will now apply to both the ENS and the RSMS, with additional occupations available to support regional employers for the RSMS.
Minimum market salary rate: Employers must pay the Australian market salary rate and meet the Temporary Skilled Migration Income Threshold.
Residency: The eligibility period to transition to permanent residence will be extended from two to three years.
Work experience: At least three years’ work experience relevant to the particular occupation will be required.
Age: All applicants must be under the maximum age requirement of 45 at the time of application.
Training requirement: Employers nominating a worker for an ENS or RSMS visa will be required to pay a contribution to the Skilling Australians Fund. The contribution will be:
payable in full at the time the worker is nominated.
a one-off payment of $3,000 for small businesses (those with annual turnover of less than $10 million) and $5,000 for other businesses.
WHAT DO THESE CHANGES MEAN FOR YOUR BUSINESS?
The TSS visa is set to have many characteristics of the current 457 program, including the changes implemented on 19th April. The introduction of the training fund levy does not provide any consideration to businesses that are already spending a large percentage of their payroll on training Australian citizens and permanent residents. In many instances business are already spending 4-5% of the payroll of the business on training expenditure, which is well over the current 1% required. The training fund levy will possibly be a better option for small businesses, but it does not incentivise businesses to invest in training to the extent the current training benchmark has.
While the employer sponsored visa programs needed to be reviewed, and changes were required, the lack of consultation and understanding of skill requirements for certain industries, appears to have resulted in some unintentional consequences. Hopefully the response from business and industries will impact how the Government proceeds with further review, design and implementation of the employer sponsored visa program.
WHERE TO FROM HERE?
The nature in which the announcements were made, without consultation and in many instances, with a lack of notice, as well as the lack of legislation available for future changes, has resulted in panic and uncertainty for both businesses and existing visa holders. SCA Connect can work closely with your HR team to assist in building a strategic plan as changes to the employer sponsored visa program are introduced.
Contact us today to find out the role we can play with your business and how we can assist your business.
