457 Visa abolishment has big impact on Australian businesses

457 Visa abolishment has big impact on Australian businesses

Last week, Prime Minister Malcom Turnbull announced the 457 visa will be abolished and replaced with a new Temporary Skill Shortage (TSS) visa. If you’re a business owner or hiring manager who employs foreign staff, you’re responsible for your staff’s compliance, and are at risk of heavy fines if you don’t follow the new regulations.

What are the changes

There are immediate and ongoing changes to the conditions of the existing 457 visa, which will be completely phased out by March 2018. At that time, a range of new regulations will be implemented with the new TSS visa. These changes aim to help prioritise Australian workers where possible, and to support businesses in effectively filling genuine skill shortages.

Some of the important changes to note include:

Immediate changes 

  • Significantly condensed occupation list, with 216 occupations removed and a further 56 restricted from the original list of 651 occupations.
  • Maximum validity periods of new 457 visas that are issued will be either two or four years, depending on the occupation the visa relates to.

Changes occurring from July – December 2017 

  • The introduction of mandatory clearance certificates as part of the visa application process.
  • Tightening of English language requirements.
  • Data matching of 457 visa holders’ tax file numbers with Australian Tax Office’s records to ensure visa holders are not paid less than their nominated salary.
  • Publication of sponsors’ details who are sanctioned for failing to meet their obligations.

Changes from March 2018 

  • 457 visas no longer being issued and are replaced with the new TSS visa.
  • TSS visa will be available as a Short-Term stream (up to 2 years’ validity with once off renewal) and a Medium-Term stream (up to 4 years’ validity with renewal and permanent residency pathways available).
  • The age limit for all applications will be 45 years’ old.
  • Mandatory labour market testing is required.
  • A minimum market salary rate will apply.
  • Visa applicants must have at least 2 years’ work experience in their skilled occupation.

You can read all the changes, and the dates they come into effect here.

Businesses sponsoring foreign workers are responsible for their employee’s compliance.

Who does it effect 

Current 457 visa holders and the businesses sponsoring them will be effected by some of the changes. All 457 visa applications that have been submitted and not yet approved, and all future applications are also impacted. Sponsors and 457 visa holders are advised to double-check their entitlements under the new visa scheme.

What are the penalties 

Along with the reforms to Australia’s skilled migration program, the government have indicated they intend to increase vigilance around inspection and compliance.

This can have a huge financial impact on organisations, with sponsors liable for heavy criminal fines of up to $108,000 per employee if found to be not compliant with the new regulations.

How to ensure you’re compliant 

The onus for complying with the legislation is on you, as an employer. The good news is that it’s easy to check an employee’s current right to work in Australia using CVCheck’s Work Entitlement Check.

Large organisations requiring a high-volume of checks are welcome to get in touch with [email protected] for additional assistance.

Continue to visit our blog over the coming weeks, as we guide you through more of the changes to Australia’s working visas.

Find out more about CVCheck's visa and work entitlement checks.

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