Abolishment of subclass 457 visa

On 18 April 2017, the Australian Government announced significant changes to employer sponsored skilled migration visas. The first is the establishment of the subclass 457 visas in favour of the new Temporary Skills Shortage visa (TSS visa). Significant changes have also been announced to the employer sponsored permanent visas.

What do employers need to know now?

Applications for new 457 visas lodged before 18 April 2017 and not yet determined may be affected by these changes.
Applications lodged for occupations that are no longer eligible for subclass 457 visas can be withdrawn with application fees refunded.
Employers with plans to sponsor employees on 457 visas in the immediate future should ensure that the relevant occupation is on the newly issued Short-term Skilled Occupations List (STSOL) or Medium and Long-term Strategic Skills List (MLTSSL) and that the occupation is not subject to a caveat restricting its use for the 457 programme.
From March 2018, the 457 visa will no longer be available and the new TSS visa will be introduced.

Changes to 457

From 19 April 2017 - Changes to Subclass 457 temporary skilled work visas

Introduction of STSOL and MLTSSL, removing 216 occupations from the current list of occupations able to be sponsored for 457 visas and placing caveats on 59 other occupations
STSOL to be reviewed every 6 months
Maximum duration of 457 visas issued for occupations on the STSOL will be two years
457 visas issued for occupations on the MLTSSL remains four years

From 1 July 2017 - Changes to Subclass 457 temporary skilled work visas

STSOL and MLTSSL to be reviewed further
Police checks mandatory for all 457 visa applicants
Abolition of current salary exemption to the English language requirement which exempts applicants whose salary is over $96,400 from the requirement to demonstrate proficiency in English to a requisite standard
Changes to policies around training benchmark requirement

Before 31 December 2017 - Changes to Subclass 457 temporary skilled work visas

The Department of Immigration and Border Protection (DIBP) will collect tax file numbers for all visa holders and match data with Australian Tax office records to confirm salaries paid to visa holders
The DIBP will publish details relating to sponsors who are sanctioned for failing to meet their obligations under migration legislation

From March 2018 - Changes to Subclass 457 temporary skilled work visas

457 visa abolished and replaced with the TSS visa

Changes to ENS and RSMS

From 19 April 2017 - Changes to employer nominated permanent residency visas

Visa applicants' occupations must be on the STSOL or MLTSSL to be eligible to apply for employer sponsored permanent residency

From 1 July 2017 - Changes to employer nominated permanent residency visas

Applicants must have an International English Language Testing System or equivalent test score of 6 in each component (currently unclear whether current exemptions to the English language requirement will continue to apply)
Direct Entry applicants must be under the age of 45 at the time of application (currently 50)

Before 31 December 2017 - Changes to employer nominated permanent residency visas

The Department of Immigration and Border Protection (DIBP) will collect tax file numbers for all visa holders and match data with Australian Tax office records to confirm salaries paid to visa holders
The DIBP will publish details relating to sponsors who are sanctioned for failing to meet their obligations under migration legislation

From March 2018 - Changes to employer nominated permanent residency visas

Applicants' occupations must be on the MLTSSL to apply for employer sponsored permanent residency
Applicants must have at least three years' relevant work experience in the nominated occupation
All applicants must be under the age of 45 at the time of application
457 visa holders eligible to apply after they have worked in the same occupation with their nominating employer for three years (currently two)
Changes to requirement for employers to contribute to training Australian workers

New TSS visa from March 2018

How will the TSS visa differ from the current 457 visa? The TSS visa will be made up of two streams, with the following criteria and restrictions to apply:

Short-term stream

For occupations on the STSOL
Granted for a maximum term of two years
Visa can be renewed onshore once only
Applicant must demonstrate that they genuinely intend to only stay in Australia temporarily
No permanent residency pathway
Applicants must have an International English Language Testing System or equivalent test score of 5, with a minimum score of 4.5 in each component (currently unclear whether current exemptions to the English language requirement will continue to apply)

Long-term stream

Occupation must be on the MLTSSL
Granted for a maximum of four years
Can be renewed onshore
Permanent residency pathway for holders after three years
Applicants must have an International English Language Testing System or equivalent test score of 6 in each component (currently unclear whether current exemptions to the English language requirement will continue to apply)

Both streams

All applicants must have two years relevant work experience (recent graduates not eligible)
Labour market testing will be mandatory - employers will be required to advertise the position locally to "test" whether there are suitability qualified Australian citizens or permanent residents who are available to fill the position before sponsoring a TSS visa
Mandatory police checks for all applicants
Employers must meet a non-discriminatory workforce test
Employers must meet requirement to contribute towards Australian workers (to be strengthened from current requirements)

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