IMPACT – HIGH

What is the change? Employers are reminded that important changes to permanent employer-sponsored skilled categories take effect in early March when the subclass 457 visa programme is terminated and replaced with the Temporary Skills Shortage visa. Transitional provisions will apply to certain subclass 457 employees applying for permanent residence after March.

What does the change mean? Foreign workers sponsored under the Employer Nomination Scheme and the Regional Sponsored Migration Scheme will be subject to stricter criteria as detailed below. However, employees who held, or applied for, a 457 visa on 18 April are eligible to be considered for permanent residency under transitional provisions that use the old criteria for occupation, age requirements, and minimum tenure.

  • Implementation timeframe: Early March 2018.
  • Visas/permits affected: Employer Nomination Scheme (ENS) visa (subclass186) and the Regional Sponsored Migration Scheme (RSMS) visa (subclass 187). The transition provisions apply to the Temporary Residence Transition stream only, not the Direct Entry stream or the Agreement stream.
  • Who is affected: Companies sponsoring foreign workers under the ENS or RSMS programmes; foreign workers holding 457 visas who may be eligible to apply for permanent residency under the transitional provisions.
  • Business impact: The tighter requirements, such as occupation, age, salary and work experience, may limit the skilled employees that companies are able to sponsor for permanent residency. Businesses will also need to budget for the new skills levy that will fund programmes to train Australian workers.
  • Next steps: The transitional provisions remain subject to final approval by immigration authorities. Employers should prepare for the upcoming changes to the ENS and RSMS programmes and identify 457 visa holders who may be eligible to be grandfathered in under old criteria for permanent residence.

Background: Below are the new criteria for ENS and RSMS schemes and a chart indicating who is eligible for certain transitional “grandfathering” provisions.

  • Occupation lists. The nominee’s job must be on the Medium and Long-term Strategic Skills List (MLTSSL) unless the employer is in a regional area (for which more occupations will be available).
  • Minimum Salaries. Employers must pay the nominee the Australian market salary rate and meet the Temporary Skilled Migration Income Threshold (A$53900 as of 12 April 2016).
  • Residency period. Workers under the Temporary Residence Transition stream will become eligible for permanent residency after three years (instead of the current two years).
  • Work experience. The employee must demonstrate at least three years of work experience relevant to the particular occupation.
  • Age limit. All applicants must be below the maximum age of 45 at the time of application (instead of the current maximum age of 50).
  • Training levy. Employers must pay a contribution to the Skilling Australians Fund. 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.

Eligibility for transitional provisions:

Nominee Eligible for Transitional Provisions?
Employee held a subclass 457 visa on 18 April  2017 and continues to hold this visa or a TSS visa or related bridging visa at the time of application for ENS or RSMS;

or

Employee lodged a subclass 457 visa application on or before 18 April 2017 and was subsequently granted this visa, and continues to hold this visa or a TSS visa or related bridging visa at time of application for ENS or RSMS.

 Yes. New criteria will apply, except for the following:

  • Old occupation list requirements apply.
  • The maximum age of 50 will apply.
  • The minimum tenure of two years’ employment in the nominated occupation as a 457 or TSS visa will apply.
All other applicants No. All new criteria apply.

BAL Analysis: Employers should prepare for the changes as they consider sponsoring employees for permanent residence under the ENS and RSMS routes. Companies are also encouraged to work with their BAL professional to preserve the grandfather rights of employees who qualify under the transitional provisions. Immigration authorities also confirmed that the new ENS and RSMS criteria will not be applied to pending applications.

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

MARN: 0101248

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