What do the changes to the 457 visa program mean for your employees and your business?

457-visaBy Emma Swenson, Migration Consultant, MARN:9801418, Patterson Houen Commins, Lawyers, Sydney.

On 18 April 2017 the government announced significant changes to the subclass 457 visa program.  An overview of some of the key changes is below:

  • a significant reduction in the number of occupations available for sponsorship under the subclass 457 visa programs, with effect from 19 April 2017;
  • changes to the English language, police clearance and labour market testing requirements, from July 2017
  • plans to abolish the subclass 457 visa from March 2018, and to replace it with a two tiered temporary visa
  • age limit of 45 years old for some permanent residence visas (reduced from 50 years old)

The occupation lists – STSOL and MLTSSL

More than 200 occupations have been taken off the list of available occupations under the 457 visa program. This means that for nomination and visa applications lodged and not yet finalised ( “in the pipeline”),  if the nominated occupation is no longer on the list, the visa cannot be approved.   Applicants will be given the opportunity to withdraw the application and request a refund.

For new applications, if the occupation is on the “STSOL” (Short term Skilled Occupations list), the visa can only be granted for 2 years.  If the occupation is on the “MLTSSL” (Medium and long term Strategic Skills list), the visa can be granted for up to 4 years.

The retrospective nature of the changes will have a significant impact on many applicants, and their employers.

Changes to English, labour market testing and character requirements

From 1 July 2017, applicants for the 457 visa will need to have a higher level of English, likely to be 6.0 on the IELTS test (an increase from the current IELTS score of 5.0).

Labour market testing will be mandatory, to show that an employer cannot fill the position with an Australian worker – currently there are some exemptions available. Surprisingly, the government has not implemented one of the key recommendations of the 2014 review of the 457 visa program, to replace employer-conducted labour market testing with independent labour market testing, to reflect changes in the economy and the impact  this has on skills shortages.

Visa applicants will need to provide police clearance certificates as evidence of character.

The new Temporary Skill Shortage visa

The new “TSS” visa will replace the 457 visa in March 2018, and will have two streams.  Applicants will be able to apply for either a 2 year or 4 year visa, depending on their occupation, and which list it is on.

The 2 year visa can only be renewed once, and cannot lead to permanent residence.

The 4 year visa can lead to permanent residence, but applicants will need to have worked for their employer for 3 years (increased from 2).

All applicants will need to have at least 2 years work experience before being eligible to apply for the visa.

There will also be changes to employers’ training obligations, with a view to funding further training opportunities for Australians through a payment into a training fund. Details are not yet available.

Current subclass 457 visa holders

Current visa holders will maintain their subclass 457 visas and are not affected by the changes.

Permanent residence visas

Some types of permanent residence visas are affected by the changes, again depending on the type of visa (employer sponsored or independent), the nominated occupation, and the timing of the application.

Contact the author directly by email or by telephone.

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