IMPACT – MEDIUM

What is the change? The Australian Department of Immigration and Border Protection is seeking responses to a proposal to require subclass 457 visa sponsors to contribute annual payments to a fund to train Australian nationals for the workforce.

What does the change mean? Annual training fund contributions would replace the current training benchmarks, which the Government has deemed ineffective. Under the current proposal, initial contributions would range from $400 to $800 for each 457 holder, depending on the size of the company.

  • Implementation time frame: The deadline for submitting a response to the proposal is 17 August 2015. Under the current framework, annual contributions would be collected from new sponsors beginning 1 July 2016 and from existing sponsors beginning 1 July 2017.
  • Visas/permits affected: Subclass 457 visas.
  • Who is affected: Employers sponsoring foreign workers in the Subclass 457 visa category.
  • Business impact: Businesses would be required to contribute annually, with their initial contributions determined by their size and the number of 457 visa holders they employ: Companies with fewer than 20 employees would contribute $400 for each 457 visa holder; companies with between 20 and 199 employees would contribute $600 per visa holder; and companies with 200 or more employees would contribute $800 per visa holder. In subsequent years, annual contributions would be set at $400 per visa holder, regardless of company size.
  • Next steps: The Government is expected to review responses that are submitted by 17 August and then formulate a final training programme.

Background: The Government endorsed the idea of replacing training benchmarks with an annual training fund contribution in March, when it announced its support for a host of Subclass 457 reforms.

A Government report on the proposal says the training fund would be used in a large part to reach out to groups underrepresented in the job market, including youth, Indigenous Australians and those living in rural areas. The fund would also target sectors of the economy that traditionally employ high numbers of 457 holders, including nursing and IT.

The Government is seeking responses, both in terms of the proposal’s administration (e.g., how to limit costs to business while ensuring quality training, whether contributions should be capped and whether any exemptions are warranted) and its investment focus (e.g., whether the proposed investment priorities are appropriate, how the success of the programme should be measured and how an independent governance board should be structured).

BAL Analysis: Those wishing to respond to the Government’s proposal are urged to do so as soon as possible. BAL will continue following the development and eventual implementation of a training fund contribution programme for 457 visa sponsors.

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

MARN: 9683856

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