Immigration Alerts

AUSTRALIA | Immigration Overhaul Significantly Reduces Eligible Occupations and Will Eliminate 457 Visa – Replacement Routes Coming

April 19, 2017

Update (April 20, 2017): Since the publishing of this Global Brief, the Australian authorities issued a series of statements seemingly repealing many of the immediate, April 19 changes to the eligible occupations lists. However, after significant confusion throughout the industry, the Department of Immigration and Border Protection (DIBP) confirmed that the new legislation changing the occupations lists is still in force and the originally announced changes will proceed as scheduled and as outlined below. Ed.

457 Visa Replaced

With Tuesday’s major announcement that his government would eliminate Australia’s commonly-used but often controversial Temporary Work (Skilled) (Subclass 457) Visa stream, Australian Prime Minister Malcolm Turnbull shocked the global business, immigration, and mobility worlds. However, taking into consideration the current political terrain and public opinion trends in Australia, this announcement was not entirely surprising.

Major revision of the employment-based immigration system, including the 457 Visa, has been in the works for some time, and the current political climate in Australia almost ensured the reforms would be announced by year-end. That being said, the dramatic announcement that the 457 Visa program was being eliminated altogether gave certain politicians and labor unions pause to celebrate, while companies understandably had much cause for concern. As the smoke of Tuesday’s announcement clears and more official information has now been released, Pro-Link GLOBAL takes this opportunity to provide an objective review of the coming system that will replace the 457 Visa program, as well as the other changes to the employment-based immigration rules. While some significant changes start today – with additional changes continuing through March 2018 – reports of the “death” of employment-based immigration to Australia are certainly premature.

457 visa changes

The 457 Visa Controversy

Setting aside the “blow-by-blow” of the recent years’ political wrangling over 457 Visa program, suffice it to say that Australia has had a love-hate relationship with its most popular employment-based immigration stream. On the one hand, the 457 Visa allowed companies operating in Australia to import the foreign talent needed to fuel what is currently the world’s second-longest sustained economic expansion of more than 25 years; however, it has also clearly been fraught with abuse on the part of some companies bringing in cheap foreign labor to the detriment of the employment and wages of local Australian workers.

While the controversy has led to refinements to the system in the past, the debate appeared to amplify beyond simple political posturing to impending action at the end of last year. Pro-Link GLOBAL identified this trend as one of our top nine global mobility changes to watch for in 2017, predicting significant 457 visa reform this year. See our “Kickstart 2017: 9 Global Mobility Changes You Need to Know Now” here. Still, the future elimination of the 457 Visa program in its entirely and the replacement of this program with another visa stream was surprising to many.

While there are significant changes from the current process being implemented, Pro-Link GLOBAL believes that many of these changes were rolled out to dissociate the current administration from the negative public perception that seemingly plagued the 457 program – and would have undoubtedly continued to plague any attempts at reform. The current and coming changes are significant, but far from the end of Australian employment-based immigration. Australia remains generally “open for business” for international companies with foreign employees, and the coming changes are navigable with the proper planning.  

What Changed Today… and What’s Changing in the Future?

To begin, it is important to note that Temporary Work (Skilled) (Subclass 457) Visas will continue to be granted through March 2018, after which the 457 Visa stream will close and be replaced by a new Temporary Skill Shortage (TSS) Visa stream.

In addition, the Department of Immigration and Border Protection (DIBP) has been careful from the outset to make it clear that current 457 Visa holders will be unaffected by these changes during the period of their visa’s current validity. The rules and regulations for the interim 457 Visa and the upcoming Temporary Skill Shortage (TSS) visa will only be applied to visa applications and renewals filed after the relevant implementation dates outlined below. Current 457 Visa holders are urged to contact their Pro-Link GLOBAL Immigration Specialists well ahead of any upcoming visa renewals for specific guidance on how these changes will impact them.

Prime Minister Turnbull’s announcement outlined several phases of changes to the current 457 Visa rules, as well as regulations covering other employment-based visas. Changes are scheduled to take effect immediately and at pre-determined intervals throughout the upcoming calendar year.

Changing Today – April 19, 2017 Major Amendments

Changes to Occupations Lists
At the heart of the changes to Australia’s employment-based visa immigration system is the renaming and revision of the current Skilled Occupation List (SOL) and the Consolidated Sponsored Occupation List (CSOL). The primary motivation behind these changes is to narrow the number of occupations that are eligible for employment visas in Australia, thereby limiting visas to only the most skilled and in-demand occupations. To that end, the current SOL list has been replaced by the Medium and Long-Term Strategic Skills List (MLTSSL), and the current CSOL list has been replaced by the Short-Term Skilled Occupation List (STSOL). These new lists are effective as of April 19 and apply to all relevant visas – including the 457 Visa and the upcoming TSS Visa – going forward. It is anticipated that the DIBP will update these lists every six months, based on advice of the Department of Employment.

Medium and Long-Term Strategic Skills List (MLTSSL) – The MLTSSL list designates those occupations now eligible for the following visas:

  • Skilled Independent Visa (subclass 189);
  • Skilled Regional (Provisional) Visa (subclass 489);
  • Temporary Graduate Visa (subclass 485); and
  • The upcoming TSS Four-Year Visa which will become available in March 2018. 

Short-Term Skilled Occupation List (STSOL) – The STSOL list designates those occupations who are now eligible for the following visas:

  • Employer Nominated Scheme (subclass 186);
  • Skilled Nominated Visa (subclass 190);
  • Skilled Regional (Provisional) Visa (subclass 489) (if nominated by a State or Territory government);
  • Temporary Work (Skilled) Visa (subclass 457) – available until March 2018;
  • Training Visa (subclass 407); and
  • The upcoming TSS Two-Year Visa which will become available in March 2018.

Effective today, 200 occupations have been removed entirely from the MLTSSL and STSOL lists. Eliminated occupations range across multiple industries and multiple organizational roles including service occupations, managers, professionals, engineers, and tradesmen. Another 16 occupations have been removed from 457 Visa eligibility but remain eligible for subclasses 189, 485, and 489. For a complete list of removed occupations, visit the DIBP website here. The occupations which remain eligible can be viewed on a combined MLTSSL/STSOL list here.

For 457 visa applications currently pending with the DIBP, visas will not be issued for removed occupations; for all other subclass visa applications currently in process, visas may be granted even if the occupation has been removed. As these changes to the eligible occupation lists are perhaps the most confusing aspect of the new rules, companies and employees with questions regarding pending visa applications are encouraged to reach out to their Pro-Link GLOBAL Immigration Specialist.

Visa Validity Periods – Additionally, as of this date, the previous practice of generally granting 457 Visas with a four-year validity will end; and these visas will be granted with either two-year or four-year validities based on the new MLTSSL and STSOL occupation lists.

Transitional Measures – As all 457 visas issued after today will be issued under the new rules, transitional measures have been put in place for currently-pending 457 visa applications. These measures allow applicants to withdraw their application, receive a refund of the government fees, and resubmit under the new rules if they chose. Companies and employees with pending applications should immediately reach out to your Pro-Link GLOBAL Immigration Specialist to determine whether withdrawing and resubmitting may be advantageous in any particular case.

Changing in the Future – Upcoming Minor Amendments

July 1, 2017 Changes

  • Police Clearances – Applicants for 457 Visas will no longer be exempt from the requirement to provide police criminal clearance certificates (PCCs). PCCs will be required for all 457 Visa applications as is required for all other visa categories;
  • Mandatory Skills Assessments Expanded – The mandatory skills assessments of some applicants will be expanded;
  • Sponsor Training Benchmarks – Minor changes will be made to the training benchmarks for 457 sponsors;
  • Online Processing Changes – The Department of Immigration and Border Protection (DIBP) will begin processing all 457 Visa applications through the newer eLodgment Plus online system, using new application forms and document requirements; and
  • Possible Additional Changes to Occupations Lists – The DIBP may make additional changes to the MLTSSL and STSOL lists.

December 31, 2017 Changes

  • Collection and Matching of Tax Data – The DIBP will begin collecting tax file numbers for all employment-based visa holders, including 457 visa holders, and will match that data against Australian Tax Office records to ensure that minimum salary requirements are being met; and
  • Publication of Sponsor Sanctions – The DIBP will publish announcements of sponsors who fail to meet their obligations under immigration regulations.

Changing in the Future – March 2018 Major Amendments

March 2018 will mark the official abolition of the Subclass 457 Visa program. Once this route is closed, applications for new 457 Visas will no longer be accepted. Rather, the 457 Visa program will be replaced by the new Temporary Skill Shortage (TSS) Visa.

Temporary Skill Shortage (TSS) Visa
The Temporary Skill Shortage (TSS) Visa – designed to replace the current 457 Visa – is slated to be introduced in March 2018. The new TSS Visa will be offered in two streams with a Short-Term (two-year) option and a Medium-Term (four-year) option, depending on the applicant’s occupation. The Short-Term stream will be open to the broadest number of occupations, with the Medium-Term stream being opened to a more-narrow range of higher-skilled occupations.

Both streams will have the following eligibility criteria:

  • Work Experience – Applicants must possess at least two-years’ relevant work experience;
  • Labour Market Test – Labour market testing will be required for all positions, unless an international agreement specifies otherwise;
  • Minimum Salary – Companies must pay the Australian market salary rate, at or above the Temporary Skilled Migration Income Threshold, currently set at AUD $53,900 since April 2016;
  • Police Clearance Certificate – Applicants must submit police criminal clearance certificates (PCCs);
  • Non-Discriminatory Workforce Test – Companies will have to complete a “non-discriminatory workforce test” showing that they are not actively discriminating against Australian workers; and
  • Local Training Requirement – Companies will have an increased Australian worker training requirement.

Short-Term (Two-Year) Stream

In addition, the Short-Term TSS Visa – issued with an initial one-year validity with an in-country option for renewal for another year – will carry the following requirements:

  • Occupations – Applicants must engage in occupations found on the STSOL list; however, additional occupations may be made available to support regional employers;
  • English Language Proficiency – Applicants must score at least a 5 or the equivalent on the International English Language Testing System (IELTS), with a minimum of 4.5 in each test component.

The Short-Term option will not present a pathway to permanent residence.

Medium-Term (Four-Year) Stream

In addition, the Medium-Term TSS Visa – renewable up to a maximum of four years – will carry the following requirements:

  • Occupations – Applicants must engage in occupations found on the MLTSSL list (generally occupations requiring a higher level of skill, training, or education); however, additional occupations may be made available to support regional employers;
  • English Language proficiency – Applicants must score at least a 5 or the equivalent on each component of the IELTS.

Only under the Medium-Term option will a TSS Visa holder have a pathway to permanent residence, becoming eligible after three (3) years of residence in Australia.

Permanent Employer Sponsored Skilled Migration

In conjunction with the above changes to the temporary employment-based streams, the new rules also make related changes to Australia’s permanent employer sponsored skilled migration program – the Employer Nomination Scheme (ENS) (subclass 186) Visa and the Regional Sponsored Migration Scheme (RSMS) (subclass 187) Visa. Starting July 1, the English language proficiency requirement will be increased to a score of at least a 6 or the equivalent on each component of the IELTS, and a maximum age requirement of 45-years-old at the time of application will be imposed in the Direct Entry stream. Then, in March 2018, the DIBP will implement an array of changes: beginning to use the MLTSSL occupations list, applying the above minimum salary and company local training requirements, beginning to impose an additional three-year work experience requirement, and beginning to extend the 45-years-old cap to both ENS Visa and RSMS Visa applications. In March 2018, the eligibility period for ENS and RSMS visa holders will increase from the current two years to three years.

How These Changes Affect You

While the most obvious changes rolled-out this week – and the corresponding media coverage – have centered on the controversial 457 Visa stream, the changes adopted by the Australian DIBP represent a major overhaul of Australia’s entire employment-based immigration scheme. Of particular note are the immediate and significant narrowing of the lists of eligible occupations allowed under all employment visa subclasses and the immediate shortening of validity periods for, and the eventual replacement of, the 457 Visa itself.

It is important to keep in mind that current 457 Visa holders are not immediately affected; however, companies and foreign employees operating in Australia should take note of both the immediate and upcoming scheduled changes, as they will have extensive impact on visa renewals and new applications going forward. In this brief, Pro-Link GLOBAL has attempted to do a thorough high-level review of all changes potentially impacting companies and their foreign employees; but, as always, there is no substitute for the direct guidance from your Pro-Link GLOBAL Australian Immigration Specialist.

457 visa changes

Caveat Lector | Warning to Reader

This is provided as informational only and does not substitute for actual legal advice based on the specific circumstances of a matter. We would like to remind you that Immigration laws are fluid and can change at a moment's notice without any warning. Please reach out to your immigration specialist or your client relations manager at Pro-Link GLOBAL should you require any additional clarification. This alert was prepared by your Pro-Link GLOBAL Knowledge Management team.

Information contained in this Global Brief is prepared using information obtained from various media outlets, government publications and our KGNM immigration professionals. Written permission from the copyright owner and any other rights holders must be obtained for any reuse of any content posted or published by Pro-Link GLOBAL that extends beyond fair use or other statutory exemptions. Furthermore, responsibility for the determination of the copyright status and securing permission rests with those persons wishing to reuse the materials. Interested parties are welcome to contact the Knowledge Management Department (km@pro-linkglobal.com) with any additional requests for information or to request reproduction of this material. 

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