IMPACT – HIGH

What is the change? The Government has confirmed upcoming changes to the permanent employer-sponsored skilled visa programs, and clarified important transitional provisions for current holders of Subclass 457 visas.

What does the change mean? Foreign workers will be subject to stricter criteria to be eligible for Employer Nomination Scheme or Regional Sponsored Migration Scheme visas. Critically, the Government has also announced that there will be transitional arrangements and that several “grandfather” provisions will apply to foreign workers who held, or had applied for, Subclass 457 visas on or before 18 April 2017 under the Temporary Residence Transition Stream.

  • Implementation timeframe: 1 March 2018.
  • Visas/permits affected: Temporary Residence Transition Stream for Subclass 457 visa holders; Employer Nomination Scheme (Subclass 186); Regional Sponsored Migration Scheme (Subclass 187).
  • Who is affected: Foreign workers who held, or applied for, Subclass 457 visas on or before 18 April 2017 under the Temporary Residence Transition Stream; companies sponsoring foreign workers under the ENS or RSMS programs.
  • Business impact: The changes to ENS and RSMS may limit the ability of companies to sponsor skilled workers for permanent residence and will increase the costs of sponsorship.
  • Next steps: Employers should work with their BAL professional to identify foreign workers holding Subclass 457 visas who may continue to use existing criteria under the transition provisions. Employers using the ENS and RSMS programs should prepare for the changes and budget for the new levies that will fund programs to train and skill Australian workers.

Details on transitional provisions: The following “grandfather” provisions will apply to foreign workers who held, or had applied for, Subclass 457 visas on or before 18 April 2017 under the Temporary Residence Transition Stream:

  • Occupations. The eligible occupations remain the same as long as the nominee continues to work in the same position for the same employer as when the Subclass 457 visa was approved.
  • Age. The age limit will remain less than 50 years old.
  • Work experience. The work experience requirement will remain the same; that is, applicants will need to have worked for their sponsoring employers on a Subclass 457 visa for two years prior to making the application.

Upcoming changes to the ENS and RSMS streams: The following changes are set to take effect 1 March 2018:

  • Training levy. Employers nominating a foreign worker for an ENS or RSMS visa must pay a contribution to the Skilling Australians Fund (subject to passage by Parliament). The fee will be A$3000 for companies with annual turnover of less than A$10 million or A$5000 for all others, and must be paid in full at the time of nomination.
  • Occupation lists. Only jobs on the Medium and Long-Term Strategic Skills List (MLTSSL) will be available to foreign employees in the Direct Entry stream for both the ENS and RSMS categories. Additional occupations will be available through the RSMS to support regional employers.
  • Salary requirements. Employers will be required to pay the Australian market salary rate and meet the Temporary Skilled Migration Income Threshold (A$53 900 as of 12 April 2016).
  • Residency period. Foreign workers will become eligible to transition to permanent residents after three years (instead of the current two years).
  • Minimum experience. Foreign workers must demonstrate at least three years of work experience relevant to the particular occupation.   
  • Age limit. The age limit for applicants will be reduced from 50 years old to 45 years old at the time of application.

BAL Analysis: Significantly, the transitional provisions allow foreign employees holding Subclass 457 visas to benefit from existing criteria. Employers should prepare for the March changes to the ENS and RSMS programs and anticipate additional changes in the coming months.

This alert has been provided by BAL Australia. For additional information, please contact australia@bal.com.

MARN: 0101248

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