Abolition and replacement of the 457 visa – Government reforms to employer sponsored skilled migration visas

Earlier on 18 April 2017, the Australian Government had announced that the Temporary Work (Skilled) visa (subclass 457 visa) would be replaced with the completely new Temporary Skill Shortage (TSS) visa in March 2018. This has now come into force and the two main streams available under this new TSS visa program are the Short term stream, and the Medium term stream.

Short-term stream visa is meant for employers to source genuine temporary overseas skilled workers in occupations included on the Short-term Skilled Occupation List (STSOL). This will be for a maximum of two years (or up to four years if an international trade obligation applies). The Medium-term stream is meant for employers to source highly skilled overseas workers to fill medium-term critical skills in occupations included on the Medium and Long-term Strategic Skills List (MLTSSL). This will be for up to four years, with eligibility to apply for permanent residence after three years.

A third stream, the Labour Agreement stream is meant for exceptional cases where standard visa programs are not available and there is a demonstrated need that cannot be met in the Australian labour market. This new visa offering is part of the Government’s significant reform package to refresh and strengthen Australia’s temporary and permanent employer sponsored skilled migration programs.

The implementation of these reforms commenced in April 2017 and were duly completed in March 2018.

Some of the key reforms include:

  • April 2017:  condensing the occupation lists used for skilled migration visas, including the subclass 457 visa.
  • January 2018:  additional reforms of the occupation lists used for skilled migration visas, including the subclass 457 and 407 visas.
  • March 2018 – TSS:  newly introducing the TSS visa, with new requirements, including but not limited to:
    • tightened English language requirements
    • a requirement that visa applicants must have at least two years work experience in their skilled occupation
    • compulsory labour market testing, unless an international trade obligation applies
    • capacity for only one onshore visa renewal under the Short-term stream
    • capacity for visa renewal onshore and permanent residence eligibility after three years under the Medium-term stream
    • a non-discriminatory workforce test to ensure employers are not actively discriminating against Australian workers
    • mandatory contribution to the Skilling Australians Fund (subject to legislation passing).
  • March 2018 – Permanent:  tightening eligibility requirements for employer sponsored permanent skilled visas, including but not limited to:
    • a requirement for visa applicants to have minimum three years work experience
    • applicants must be below the maximum age requirement of 45 at the time of application (unless exemptions apply)
    • employers should pay the Australian market salary rate and meet the Temporary Skilled Migration Income Threshold (TSMIT)2
    • mandatory contribution to the Skilling Australians Fund (subject to legislation passing).

Further reading on these reforms is available at these links