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Are you in or are you out? Closing the TSS Gap, Interim 457 Changes

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Guest post by Raphael Grossman - Solicitor at Lehman Walsh Lawyers

The abolition and replacement of the Temporary Work (Skilled) visa, also known as the 457 visa, will be painful for start-ups who rely on the 457 visa to procure talent overseas. The new visa, the Temporary Skill Shortage (TSS) visa, is a lot less attractive to start-ups.

The TSS won't replace the 457 visa until March 2018 and until then it is still possible to apply for the 457 visa. From 1 July 2017, transitory changes under legislative instruments have been implemented affecting the 457 visa. These changes will impact potential and current applicants. Applications that were started but not submitted before 30 June 2017 are now discontinued and a fresh application will have to be started.

Some of the key changes to the 457 visa in the interim period include:

  • Addition and removal of occupations that are eligible to apply for the 457 visa;
  • In some cases the removal of the English language exemption for applicants with salaries over AUD$96,400;
  • Visa validity extended to 4 years for some occupations and under specific conditions; and
  • Sponsorship accreditation approvals expanded for low risk sponsors.

 

The replacement TSS visa will have a Short-Term and Medium-Term Stream which will apply for two years and four years respectively. Some of the key differences between the 457 visa and the new TSS are:

  • Changes to the occupation list.
  • Requirement to have two years of work experience in the occupation list.
  • Employers to pay Australian market rate to not undercut Australian workers.
  • Only applicants of the Medium-Term Stream will have a pathway to permanent residency.
  • Permanent residency requiring a three year stay in Australian instead of two years.
  • Instead of current training benchmarks, employers to pay contributions to the Skilling Australians Fund.
  • Increased English requirements.

Though the changes do hurt start-ups and small businesses, they also have some upsides. For example, the quality of overseas workers in Australia will likely be higher due to the increased work experience requirements. The TSS will also be fairer to workers as it prevents employers paying less than minimum wage and taking advantage of employees from overseas. Nevertheless, it is clear that the new TSS will be costly for start-ups who need to keep initial costs low and want the choice of being able to hire capable workers who are new to the workforce. Therefore, it is a good idea to employ workers under the current 457 visa while it is still available.

Failure to comply with the new requirements associated with new 457 visas may prevent applicants from receiving a visa and may cause applicants to miss the boat. Therefore, during this transitional period, if you are thinking of applying for a 457 visa or are considering hiring employees overseas, you should consider contacting a lawyer for advice to make sure you are clear on the requirements.