On 18 March 2018, the new Temporary Skill Shortage (TSS or subclass 482) Visa program commenced. This visa program replaces the old subclass 457 visa program, which has now been abolished.
The new TSS visa is designed for Australian employers who have a genuine need to employ skilled workers on temporary resident visas.
The Australia Federal Government, through the new Department of Home Affairs, has implemented this change to address public concerns about the displacement of Australian workers. This transition to the new TSS visa program is aimed at better meeting Australia’s skill shortage needs and improving the quality, economic contribution and integration of skilled migrants.
The new TSS visa, similar to the old 457 visa program, has three mandatory stages:
- Sponsorship – the employer proposing to hire one or more skilled worker(s) must lodge an application to become a Standard Business Sponsor (SBS). If approved, this SBS will last for 5 years, and will allow the employer to nominate the skilled workers they require in that time period.
- Nomination- the employer must then nominate each skilled worker they wish to employ. The worker must have an occupation on the Department of Home Affairs’ occupations lists for the TSS visa.
- Application- the overseas skilled worker must then lodge their visa application, showing they have the skills and qualifications necessary to fulfil the position.
This article aims to help existing subclass 457 visa holders, potential TSS applicants, and employers who sponsor temporary skilled workers to navigate these visa changes.
This article is not intended to be comprehensive legal or migration advice. Potential applicants and employers can contact Rostron Carlyle Lawyers to set up a consultation to receive migration advice specific to their situation.
For Employers
Sponsorship under Temporary Skill Shortage Visa
Businesses who wish to employ skilled workers can apply to become TSS Standard Business Sponsors (SBS).
The business must show that they are lawfully operating in Australia, or are an overseas business looking to set up operation in Australia. If the sponsorship is approved, it will allow businesses to nominate skilled workers at any point within a 5-year period.
Sponsors must make payment to the Skilling Australians Fund for every TSS worker they nominate. This Skilling Australians Fund has not yet been created, but it is anticipated to begin in the next few weeks, pending the passing of legislation in parliament.
The Skilling Australians Fund (SAF) levy is anticipated to be:
- For small businesses (turnover under $10 million): $1200 per year or part year; and
- For other businesses: $1800 per year or part year.
Training Obligations for existing Standard Business Sponsors (SBS)
If you are an existing SBS, your sponsorship period will continue until its expiry date, and you are able to nominate TSS workers up until your SBS expiry.
Following the implementation of the Skilling Australians Fund (SAF), Sponsors will no longer be required to spend 1% of their payroll on training. The SAF will substitute this requirement.
Until the SAF legislation is passed in parliament, the training obligation remains for existing sponsors under their current sponsorship obligations.
Please also note that for existing sponsors, the training obligation will continue to apply to their previous sponsorship years.
Changes to the Sponsorship system
There have been a number of changes made from the previous Standard Business Sponsor (SBS) system.
Firstly, all sponsors will be approved for a 5-year sponsorship period. Previously, new businesses would only be granted an 18-month sponsorship period.
Secondly, there will be streamlined processes available for existing sponsors looking to renew their sponsorship. If your sponsorship period is due to expire, a renewal of sponsorship can be lodged prior to its expiry, which will be a more efficient process than the initial sponsorship application.
Thirdly, the existing accreditation criteria are anticipated to be expanded. If you are a business that nominates skilled workers and fits into one of the following categories, you may be eligible to apply to become an accredited sponsor.
- Category 1: Commonwealth and State/Territory Government or Statutory Entities
- Category 2: Australian Trusted Traders
- Category 3: Low risk sponsor with low volume usage and high percentage of Australian workers
- Category 4: Low risk sponsor with high volume usage and medium percentage of Australian workers
If you receive accreditation, any nomination and visa applications lodged will receive priority processing with the Department of Home Affairs. The Department of Home Affairs has also indicated that they are implementing auto approval of accredited sponsors’ nomination applications, which will greatly increase the efficiency of the TSS visa process.
Finally, employers are now specifically prohibited under the SBS process from recovering any costs related to the sponsorship process and visa applications. It is vital that Sponsors are aware of their sponsorship obligations to the Department of Home Affairs. If you are unsure about your obligations, Rostron Carlyle Lawyers can assist you in understanding these obligations.
Nomination under the Temporary Skill Shortage Visa
Once a business is approved as a Standard Business Sponsor, or after the application has been lodged, the business is able to nominate a skilled overseas worker for a TSS visa.
There are three streams available under the TSS visa:
- Short-Term stream: This stream is for skilled workers whose occupation is on the Short Term Skilled Occupation List (STSOL) at the time of nomination. The worker can be nominated for up to two years, unless an International Trade Obligation applies.
- Medium-Term stream: This stream is for skilled workers whose occupation is on the Medium to Long Term Strategic Skilled List (MLTSSL) or the Regional Occupation List (ROL) at the time of nomination. The worker can be nominated for up to four years.
- Labour Agreement stream: This stream is available in very limited circumstances for employers who do not fall within the usual Standard Business Sponsorship program. This stream will not be discussed in this article.
The position offered to the skilled worker must meet the following key requirements:
- The job offered must be for a fulltime position;
- The skilled worker must be offered the same employment terms and conditions that would be offered to an Australian employee;
- The skilled worker must be offered a market salary for the position. The market salary must be determined in accordance with up to date reference to the local job market;
- The salary offered must be at least the Temporary Skilled Migration Income Threshold, which is currently $53,900;
- If hired under an employment contract, the contract must comply with all Australian employment law; and
- The employer must demonstrate that they have a genuine need for the skilled worker to work in the business in the nominated occupation.
The employer must also demonstrate that they have complied with the Labour Market Testing requirement. The employer must prove that they have tested the local labour market and have been unable to find an Australian worker to fulfil the position. There are specific criteria to be met, including publishing two advertisements for the position and demonstrating that there are no suitable Australian candidates for the job.
For Skilled Workers
If you are a skilled worker who is interested in being sponsored to work for an Australian employer, you can consider your eligibility for the new TSS Visa. Applicants can apply for the TSS visa while offshore or onshore provided there are no prohibitions on their existing Australian visa.
If you are applying in Australia, you must hold a valid substantive visa, or a Bridging Visa A, B or C.
The TSS visa in the Short-Term and Medium-Term streams is only available to workers whose occupation is on one of the Department of Home Affairs’ occupation lists.
After your employer has initiated the first two stages in the process, the Sponsorship and Nomination as detailed above, you can prepare for your TSS visa application.
Short-Term Stream TSS Visa
If your occupation is on the Short-Term Skilled Occupation List (STSOL), you can be nominated for up to two years, unless an International Trade Obligation applies.
A Short-Term stream applicant must demonstrate the following:
- Proof of English language. Unless an exemption applies, applicants must show an English test score equivalent to an IELTS 5, with no band lower than IELTS 4.5. An alternative English test can also be acceptable, such as PTE (score of 36 with no band lower than 30) or TOEFL;
- Skills and qualifications to perform the position they have been nominated for;
- At least two years of work experience in the nominated occupation or a closely related occupation;
- The position offered to the applicant must meet any relevant caveats or restrictions placed by the Department of Home Affairs on the applicant’s occupation; and
- The Genuine Temporary Entrant requirement – Applicants for the Short-Term stream must demonstrate that they only intend to remain in Australia temporarily.
Certain applicants of certain trade occupations may be required to undertake a skills assessment, if they are a passport holder from a designated list of countries.
It is also important to note that if you are a Short-Term stream applicant, you can only apply for a maximum of two TSS visas onshore (two years + two years). After that, you must go offshore if you wish to apply for any further TSS visas.
There is no permanent residence pathway available to new TSS applicants in the Short-Term stream. Permanent residence pathways are only potentially available to those who had applied for or held a subclass 457 visa on 18 April 2017.
Medium-Term Stream TSS Visa
If your occupation is on the Medium to Long Term Strategic Skilled List (MLTSSL) or the Regional Occupation List (ROL), you can be nominated for up to four years.
A Medium-Term stream applicant must demonstrate the following:
- Proof of English language. Unless an exemption applies, applicants must show an English test score of IELTS average 5, with no band lower than IELTS 5. An alternative English test can also be acceptable, such as PTE (score of 36 with no band lower than 36) or TOEFL;
- Skills and qualifications to perform the position you have been nominated for;
- At least two years of work experience in the nominated occupation or a closely related occupation;
- The position offered to the applicant must meet any relevant caveats or restrictions placed by the Department of Home Affairs on the applicant’s occupation category; and
- If your occupation is on the Regional Occupation List, the position offered must be in regional Australia.
Certain applicants of certain trade occupations may be required to undertake a skills assessment, if they are a passport holder from a designated list of countries.
TSS visa holder in the Medium-Term stream may also have an option to apply for a permanent stage visa after working for their employer for a period of 3 years.
Comparisons to the subclass 457 visa
The new TSS Visa is the replacement of the old 457 Visa program. However, there have been substantial changes and restrictions introduced to the new TSS visa program which will have an impact on the employers who require temporary skilled workers, and skilled migrants looking for different visa options in Australia.
The Federal Government first announced the abolishment of the subclass 457 visa on 18 April 2017. Over the past 11 months, the Department of Home Affairs has introduced incremental changes to the subclass 457 visa, in preparation for the introduction of the TSS visa on 18 March 2018.
The changes from the old 457 visa to the new TSS visa program include the tightening of the labour market testing and market salary criteria, requiring TSS applicants to have at least two years of work experience in their nominated occupation, replacing training requirements for sponsors with the SAF levy, and reducing the visa term from four years to two years for applicants whose occupation is on the STSOL.
Perhaps the most significant change has been the reduction in occupations available for nomination for a temporary work visa. Prior to 18 April 2017, there were 651 occupations on the skilled occupation lists. This number has now been reduced to 461.
Furthermore, the ability for temporary skilled workers to transition to permanent resident visas has also been narrowed. Temporary skilled workers must be on a Medium-Term TSS visa and have an occupation on the MLTSSL or the ROL to have the ability to transition to a permanent residence employer visa. However, there are transitional arrangements in place for those who held, or had applied for, a subclass 457 visa on or before 18 April 2017.
Starting the Process
If you are an employer looking to employer overseas skilled workers, or a skilled worker looking for visa options in Australia, Rostron Carlyle Lawyers can assist you.
The article above provides a summary of the key criteria for the new Temporary Skill Shortage visa. Rostron Carlyle Lawyers can assess your eligibility to apply and assist in the preparation and lodgement of the three stages of the TSS process.
Anna Gunning-Stevenson, Rostron Carlyle Lawyers
Lawyer and Registered Migration Agent, MARN 1797244
Contact us for a consultation today:
Peter Kuek-Kong Lee, Special Counsel and Registered Migration Agent MARN 0427478
Anna Gunning-Stevenson, Lawyer and Registered Migration Agent MARN 1797244
(07) 3009 8444
