Navigating the New 457 Visa Reforms – The Way Forward

May 2, 2017

The Temporary Work (subclass 457) is one of Australia’s most common temporary visas as it was designed to help Australian businesses engage skilled overseas workers to fill the skills shortage in certain occupations, if Australian businesses could not find qualified Australian citizens or permanent residents to employ for the position.

The 457 visa has come under scrutiny, with public concern mounting regarding the displacement of Australian workers. As such, the Australian Government will be introducing a new Temporary Skill Shortage Visa (TSS) to replace the 457 visa. There will be periodic changes to prepare for the complete abolition of the 457 by early 2018. The first of the changes came in on 19 April 2017, and will be followed by changes to be introduced in July 2017, December 2017 and finally, in March 2018.

As of 19 April 2017, the Department of Immigration and Border Protection (DIBP) has removed 216 occupations from the list of occupations that are eligible to apply for a 457 visa. These lists have also been renamed. The original Consolidated Sponsored Occupation List (CSOL) is now the Short-term Skilled Occupations List (STSOL) and the original Skilled Occupations List (SOL) is now the Medium and Long-term Strategic Skills List (MLTSSL). The occupations on the STSOL will only be eligible for the grant of a two year visa (with a possible onshore renewal for a further two years), whereas the occupations on the MLTSSL list are still eligible for a four year visa. Occupations that been removed from these list are no longer eligible for the 457 visa. For applicants who have lodged and are still awaiting an outcome, the visa will be refused. In this case, the DIBP have allocated a grace period in which applicants can withdraw their application and get refund of the nomination and/or visa application fee.

From 1 July 2017, further changes will be implemented including an additional revision of the occupation on the STOL and MLTSSL, changes to the English Language salary exemption, clarification around existing training benchmarks and tightening of good character requirements. Currently, applicants with a salary of over $96,400 are exempt from meeting the English Language salary exemption threshold, however, this will be abolished in July. English tests will therefore become a requirement for all applicants who are not exempt for other reasons such as being the holder of a passport from an English-speaking country.

Standard Business Sponsors will also be affected by the changes. Along with visa holders, standard business sponsor also have requirements that they must adhere to, including training benchmarks. The training benchmarks require the Australian business to invest in training Australian’s in the same industry. This can be through training their Australian employees or investing in an industry training fund that operates in the same industry as the business. Changes that will occur in July will see ‘policy settings about the training benchmark requirement will be made clearer in legislative instruments.’ [1] Finally, as of 1 July 2017, all applicants are required to submit penal clearances.

From 31 December, the Australian Government will put structures in place to ensure that overseas workers are being paid their appropriate, nominated salary. To do this, the DIBP will be collecting Tax File Numbers of visa holder to match with the Australian Tax Office’s records. They will also introduce sanctions for sponsors who fail to meet their obligations under the Migration Regulation 1994 and related legislation.

All these changes will amount to the abolition of the 457 visa in March 2018. The 457 visa will be replaced by the Temporary Skills Shortage (TSS) visa. There will be two streams of the TSS, the Short-Term stream and the Medium-Term stream. Both streams will require visa application to have at least two years of relevant work experience, a salary equivalent to the market salary rate of the position and meet the Temporary Skilled Migration Income Threshold (TSMIT)[2] and mandatory penal clearances. Standard business sponsors will be required to complete compulsory Labour Market Testing (LMT), partake in workforce testing to ensure employers are not actively discriminating against Australian workers and complete training benchmark requirements. The Medium-Term stream is designed to allow employers to ‘source foreign workers to address shortages in a narrower range of high skill and critical need occupations’[3] and will remain very similar to the current 457 visa program in regards to policy and the ability for visa holders to engage in a permanent residency pathway after three years. The Short-Term stream, however, is significantly different. The Short-Term stream is designed to fill skill gaps with foreign workers on a temporary basis. The Short-Term stream TSS visa will only be granted for two years with one possible renewal and no pathway to permanent residency.

In general, the DIBP are tightening policies and becoming increasingly forensic in their review of applications. Immigration Solutions Lawyers are experts in the field of Australian Immigration Law and can help you submit a strong decision ready application.

For our Principal Lawyer’s interview with Lawyers Weekly on the new 457 changes, please click here.

For more information on Immigration Solutions Lawyers, please click here.

[1] The Department of Immigration and Border Protection, Fact Sheet one: Reforms to Australia’s temporary employer sponsored skilled migration programme – abolition and replacement of the 457 visa, 19 April 2017.

[2] The current TSMIT is set at $53,900 as of 12 April 2016.

[3] Above n 1.