Immigration Insights | Death knell of the subclass 457 visa

Ode to the subclass 457 visa

For most of my professional career, I have worked intimately with the subclass 457 visa throughout its various permutations such as the abolition of key activity and non-key activity requirements, the introduction of ASCO and subsequent alias ANZSCO, from the MSR and TSMIT to Guaranteed Annual Earnings, and to behavioral changes such as the knee jerk focus on the ‘benefit to Australia’ following the GFC, and more recently the genuineness test not to mention the lists upon lists upon lists with varying acronyms like MODL, SSASSL and CSOL.

In short, it has been like all relationships – somewhat tumultuous!

And finally, we will soon put to rest the infamous three numbers that have dominated the migration industry since 1996. The exact date of execution/death remains unknown but the higher ups in Canberra suggest that the 457 has roughly ten months to live.

So 457, farewell and thank you!

The dust is settling (somewhat)…

In our recent client alerts, we provided you with information sourced from factsheets, departmental press releases and commentary through various industry bodies. As the dust begins to settle, we can now look at what this really means and what we have undertaken with the majority of our clients on how to approach the current landscape and what looms on the horizon.

To preface, the regulations and policy for the Temporary Skill Shortage Framework has not been finalized, let alone published. As such, our industry and the government do not have all the answers. The unfortunate reality is that much of what we are uncovering through the departmental press releases has not been set in stone, and so for many of our clients, it is a waiting game.  For others, it means we have to get moving onto planning and strategy.

In brief, this is what has happened or is happening:

1. Occupation lists have been significantly condensed from 651 to 435 occupations with 216 occupations removed and access to 59 other occupations restricted;
2. The Consolidated Occupation List (CSOL) has been renamed the Short-Term Skilled Occupation list (STSOL) and will be the subject of continuous review at 6 monthly intervals;
3. The maximum duration of 457 visas issued from 19 April 2017 for occupations that are on the STSOL is 2 years;
4. Permanent visa options for subclass 457 visa holders continue to remain in place pursuant to both streams of the subclass 186 visa;
5. The English language exemption under the salary rule will be removed from the subclass 457 visa on 1 July 2017 and the English language requirement for permanent residence under subclass 186 (Temporary Residence Transition Stream and Direct Entry Stream) will be made consistent, with 6.0 in each component of an IELTS examination or equivalent.
6. The immigration department will collect tax file numbers for 457 visa holders and all other employer sponsored migrants and that data will be matched will ATO records effective from 1 July 2017;
7. Application of a ‘genuine temporary entrant’ test under the Temporary Skills Shortage visa that could be a possible reason for refusal if an assignee/applicant states that they have intentions to apply for permanent residence following grant of their TSS visa.
8. Training benchmarks will be overhauled in March 2018 to include levies based on turnover and staff numbers.

So what does this actually mean?

Simply, this means, you must be prepared!  Clients should start to look at their business intentions and plans for the next 10 months and further to determine their immediate staffing and mobility needs.  Visa applicants and subclass 457 visa holders should start to look at their permanent visa options or at the very least look at a renewal and start planning accordingly.

In particular, we would suggest the following plan of action:

1. Review the visa expiry dates for all sponsored subclass 457 visa holders and determine whether a renewal is required or whether the employee will be transitioning to permanent residence or will require a renewal post March 2018;
2. Review the usual occupations which you nominate to determine whether a ‘caveat’ may apply and how you can tackle that restriction;
3. Review assignee population against that the upper age limit which will be reduced to 45 for direct entry under the subclass 186 visa. Exemptions are currently available but unknown to us when they may be removed. If applicants are looking to apply for permanent residency and they are 45 this year, we suggest they contact us immediately so we can assess whether they are eligible to apply for PR before the change comes into effect, particularly those who will turn 46 and will be eligible for the TRT stream after March 2018.
4. Review current training expenditure to determine whether there is a budget for the new training levy to be introduced in March 2018 and make adjustments to expenditure accordingly.
5. Review upcoming projects and trends within your business and consider compiling a job description now to determine whether the proposed occupation would be allowable under current subclass 457 visa arrangements or whether there would be some ‘tweaking’ of the role required;
6. Review upcoming promotions or potential movements within your mobility program to ensure that your assignees/applicants are able to maintain the most beneficial status under law;
7. Any or all potential assignees/applicants should apply for a police clearance certificate for every country that they have lived in for 12 months or more in the last 10 years. In particular, we recommend US and Canadian nationals to undertake this now as applications from their respective policing organizations can take 9 months or more to process and issue;
8. Any or all potential assignees/applicants should look at English language testing in preparation for an application as the removal of the salary exemption could result in delays with more assignees/applicants requiring testing that could result in a backlog with the relevant testing centres. On that note, we have received feedback from our peers that has suggested TOEFL to be the most unbiased test of the available systems. Further information on this testing platform can be found here: https://www.ets.org/toefl;
9. Any businesses who have utilized occupations in the 216 deleted occupations or in the STSOL may consider an industry or company specific labour agreement. At present, there are 8 industry specific labour agreement templates that can be negotiated with the immigration department. That said, this path can be treacherous if there is insufficient data on genuine skill shortages, which we know to mean a lack of talent due to the length of time for Australian labour market to upskill to that occupation. We are in the process of advising and negotiating on a number of labour agreements;
10. Keep talking to us – we are here to help! This is a challenging time and we are conscious that the lack of information and disclosure by the immigration department may leave many clients in limbo but we will be actively working with our peers and the department to ensure that the right planning and advice is available to all our clients.

Bits and pieces

Kerin has a new email address: kjitla@giltonvaleo.com.au. So a belated congratulations to Kerin Jitla (nee Bhatty) on her wedding last year! It was lit!

Our new office line is (61 2) 8234 8400. Our old line has been permanently diverted to the new line and will remain so for the foreseeable future. Same, same but different!