457 Visa: Accredited Sponsorship – A fairer approach for business

Perhaps the most pleasing amendment made to the 457 visa program on 1 July 2017 was the broadening of categories of business which may be eligible for Accredited Sponsorship under the 457 visa program.
Accredited Sponsorship:  What are the benefits?

Prior to employing an overseas national on a 457 visa, the business must first apply to the Department of Immigration & Boarder Protection (“DIBP”) to become an approved sponsor.  Established businesses will either be approved as a standard sponsor or if they meet certain, additional requirements, will be approved as an accredited sponsor. 

The benefits for a business approved as an accredited sponsor include:

• sponsorship approval for a longer period (typically six years instead of five);
• streamlined nomination process in certain circumstances; and
• priority processing for all nomination and visa applications.

In short, accredited sponsors wait less time for their employee’s visa to be approved.  Current processing times for 457 visas have blown out to up to five months most applications so taking steps to determine if your business is eligible for accreditation is a very simple way of being able to get your overseas national staff member working for your business, sooner. 

Accredited Sponsorship:  What are the categories?

There are four categories of business who are eligible to become an accredited sponsor:Category 1:         Commonwealth, state and territory government agencies

• Category 2:         Australian Trusted Traders
• Category 3:         Low Volume Users with High Proportion of Australian employees; &
• Category 4:         High Volume Users with Medium Proportion of Australian employees
  

The required characteristics for each category are further defined and the below is a summary of the requirements. 

 Table One:  Summary of Characteristics for Accredited Sponsor Categories

	Required Characteristics
Category 1: Commonwealth, state and territory Government Agencies	·         Australian workforce is at least 75%
Category 2: Australian Trusted Traders	·         Australian workforce is at least 75% ·         Demonstrate that all employees are engaged under a written employment contract which includes the at least the minimum employment entitlements under the National Employment Standards.  ·         Demonstrate that existing employees are paid in accordance with an Enterprise Agreement or internal salary table that is reflective of current market rates for all occupations within the business
Category 3: Low Volume User	·         Australian workforce is at least 90% ·         Have had at least one primary 457 visa holder in the two years prior to the application for accreditation ·         Publicly Listed company or private company with at least AUD$4Millon turnover in the last 2 years ·         Have been an active 457 sponsor for at least 2 years ·         Demonstrate that all employees are engaged under a written employment contract which includes the at least the minimum employment entitlements under the National Employment Standards.  ·         Demonstrate that existing employees are paid in accordance with an Enterprise Agreement or internal salary table that is reflective of current market rates for all occupations within the business ·         Provide details of all business activities to the DIBP ·         Provide details of all Principals/Directors of the business to the DIBP
Category 4 High Volume Users	·         Australian Workforce is at least 75% of the workforce ·         Have had at least ten primary 457 visa holders in the two years prior to the application for accreditation ·         Publicly Listed company or private company with at least AUD$4Millon turnover in the last 2 years ·         Have been an active 457 sponsor for at least 2 years ·         Demonstrate that all employees are engaged under a written employment contract which includes the at least the minimum employment entitlements under the National Employment Standards.  ·         Demonstrate that existing employees are paid in accordance with an Enterprise Agreement or internal salary table that is reflective of current market rates for all occupations within the business ·         Provide details of all business activities to the DIBP ·         Provide details of all Principals/Directors of the business to the DIBP
NOTE:	The above table is a summary of the characteristics only.  Use this as a guide only.  Make your own enquiries and seek advice from Nevett Ford Lawyers as to the full requirements a business is required to meet

 The period between nomination/visa lodgement and approval is often characterised by a frustrating waiting game for employee and business where your employee is unable to commence working for the business.  The changes made to the accredited sponsorship criteria offer a genuine opportunity for all businesses accessing the 457 visa program to reduce the timeframes associated with this “lost time” and get your employee to start work sooner.  We would suggest that business with robust HR practices that are responsive and up-to-date with legislative changes to workplace laws are appropriately placed to take advantage of these changes.  

Should you have any questions about the above information or if you want to discuss how your business can access these arrangements in more detail please do not hesitate to contact us for a confidential discussion on (03) 9614 7111 on send us an on-line enquiry.

 

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Migration Law Update: Big Brother is Watching

One of the government’s recent announcements around the Australian 457 Visa program which appears to have gone relatively unnoticed is that from December this year the Department intends to start collecting tax file numbers of 457 Visa holders and other employer-sponsored migrants for the purpose of matching that information with Australian Taxation Office (ATO) records to ensure that Visa holders are not paid less than the nominated salary.

Unfortunately, the underpayment of workers who have poor English skills and are on visas is a chronic problem in the Australian workspace. It was recently reported by the Fair Work Ombudsman that of all requests for assistance from the Ombudsman in 2016/17, 18% came from workers on visas – an increase on the previous year and significantly disproportionate to the number of workers on visas. It was also reported that half the cases that made it to court involved a visa worker.

Another announcement which has also received little publicity but which should be of concern to employers is that by December the Department intends to publish on its website details relating to sponsors sanctioned for failing to meet various statutory obligations, including their migration law sponsorship obligations.

The wording of the announcement makes it very clear that not only breaches of migration obligations which will be published. At this stage the types of obligations which are being contemplated have not been detailed but could, for example include failure to pay tax and breaches of workplace laws – being issues that prospective employees might be interested in knowing about before deciding whether or not to accept an offer of employment. It is also not clear what timeframes are contemplated – for example will it only be in respect of breaches committed from December this year or does it include past breaches? If so, how far back do they propose to go and how long will details be published before the publication is withdrawn. Also, what appeal rights if any will employers have in respect of any grievances regarding the accuracy of the publication process.

Until more details are published these questions will remain answered but are issues that all employers should be aware of and concerned about.

Please contact Nevett Ford Lawyes for migration law and visa advice.

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457 Visa - Training Benchmark changes

Changes continue to be rolled out by the Department of Immigration & Border Protection (DIBP).  A recent change relates to the training benchmarks that 457 business sponsors are obliged to meet - this article explains how the changes impact employers.

Benchmark A - Payments to a Training Fund

This involves paying 2% of payroll to an industry training fund. From July 2017 payments may be made to one of the following:

• Industry training fund
• Fund managed by recognised Industry Body
• Scholarship fund operated by Australian TAFE or University.

The following types of expenditure are now not eligible:

• Funds operated by RTOs or private individuals
• Funds paying commissions or offering refunds if application fails

The main impact of this change is that the previous practice of private education providers accepting payments for Benchmark A will be discontinued.

Benchmark B - Expenditure on Training Australians in the Business

This involves spending 1% of payroll on training Australians in the business. From July 2017 payments may include:

• Apprentices, trainees or recent graduates
• RTOs delivering face-to-face training which contributes to formal qualification
• eLearning or training software
• Formal courses of study + associated costs (e.g. travel)
• Training officers - must be "sole role" of the employee (to train other employees in the business)
• Attending conferences for Continuing Professional Development (CPD).

The following types of expenditure are now not eligible:

• Salaries of staff attending training
• Membership fees - this was previously counted
• Books, journals or magazine subscriptions - this was previously counted
• Conferences for purposes other than CPD
• Hiring a booth at trade show, conference or expo On-the-job training - previously, structured on-the-job training could be counted in some circumstances
• Training not relevant to business' industry - it is not clear how closely related the training must be to the industry
• Training of principals or family members - previously, training of family members could be counted providing it was also made available to other employees
• Induction training.

Based on current information, it appears that payment of external providers to deliver training for Australian employees, is excluded unless it leads to a formal qualification. This would form the bulk of the training expenditure of most businesses and so many will need to restructure their training to comply with the new Benchmark B. Once further clarity is available we will let you know.

What is also unclear at the moment is whether 457 business sponsors who have been calculating their training benchmark expenditure on the previous training benchmark provisions will be deemed to have satsified the requirement. 


We are awaiting further clarificaton on these points from DIBP and will provide further updates once available.

Calculating 'Payroll'

As a general rule, payroll includes:

• wages and salaries as per state payroll legislation, and
• payments made to contractors or subcontractors if the work completed is related to services or products provided by sponsor

If the business does not have ‘a payroll’ they are expected to count Directors' salaries, fees and drawings, or the profit of the business.

Timing of Training Activities

Payroll and training expenditure must be for the same period.

From July 2017, it has been clarified that this expenditure may be for the 12 months prior to lodgement of an application, or for the previous full financial year - this should help employers to gather relevant information and documentation.

Start-up businesses operating for less than 12 months will be required to show they have an auditable plan to meet these benchmarks.

We will provide ongoing updates as information becomes available, including the training requirements from March 2018 when the new ‘Temporary Skills Shortage’ (TSS) visa commences (replacing the current 457 visa).


Whether you are an individual visa holder considering how these changes affect you personally or an employer wondering how these and the further proposed changes affect your ability to recruit globally please feel free to contact us at Nevett Ford to see how we are able to assist. 

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Migration Changes: July 2017 - March 2018

There is a large number of changes to migration law from July 2017 through to March 2018. 


1st July 2017
  

Processing Fees

Processing Fees are set to increase in line with the forecasted Consumer Price Index. Visa fees will be indexed annually from July 2017 onwards. Indexation will not apply to the second instalment of visa fees. 

457 Visa Changes

• Occupation Lists: The STOL occupation list will be reviewed and condensed further.
• English Language Requirements: English language test exemptions for applicants with a salary of over $96,400 will be removed.
• Character: Provision of penal clearance certificates will become mandatory. 

Additional Pathway to Permanent Residency for New Zealand Citizens

An additional pathway to Permanent Residency will be available from the 1st of July 2017 for New Zealand citizens who are special category visa holders, have been in Australia for at least 5 years, have arrived after the 26th February 2001 and can demonstrate set annual minimum income levels.

Up to 80,000 New Zealanders are expected to become eligible for Permanent Residency and applications are expected to be capped and queued. 

General Skilled Migration Changes

• Reduction of the Maximum Age:  The maximum age for the Skilled Independent Subclass 189 visa is set to decrease from 49 to 45 years.
• Revision of Skilled Occupation Lists:  MLTSS and STOL occupation lists are likely to be reviewed and some flagged occupations, particularly in the engineering sector are likely to be removed.
• Limitation of Skilled Invitation Numbers: Occupations ceilings indicating maximum numbers of invitations that can be issued to the Skilled Independent Subclass 189 and Skilled Regional Provisional Subclass 489 visa applicants will be released.
• State Sponsorship: Nominated Skilled State Migration programs will reopen. Many occupations are expected to be filled quickly and we recommend applicants to lodge their applications early. 

November 2017

New Temporary Sponsored Parent Visas

The introduction of the new temporary sponsored parent visa for bringing in overseas parents of Australian citizens and permanent residents has been postponed to November 2017. 15,000 visas will be made available annually. The visas will be valid for 3 or 5 years at a cost of $5,000 and $10,000 respectively.  The new parent visa will be renewable for a combined maximum of 10 years. 


December  2017

Employer Sponsored Migrants

The DIBP will commence the collection of tax file numbers for current 457 visa holders and other employer nominated and sponsored migrants. The resulting data will be matched with the ATO’s tax records to ensure that visa holders are not paid less than their nominated salary. 

The DIBP will commence the publication of details of sponsors sanctioned for failing to meet employer obligations.


Early 2018

Partner Visas

Partner Visa Sponsorship changes will not proceed as of the 1st July 2017. The new regulations proposed that partner visa sponsorship applications would need to be lodged under stricter criteria and approved before the overseas partner visa application could be lodged.

The new 2 step process is expected to delay the lodgement of the overseas partner application and require the overseas partner to have a valid visa until a visa application for the overseas partner can be lodged.The bill proposing the new regulations is currently before the Senate and as such has not been enacted. It is likely to not come into effect until 2018.

We recommend that our clients take advantage of the deferral of the new regulation and lodge their sponsorship and partner visa application prior to the 2018 changes.

March 2018

Pathways to Permanent Residency for Current 457 Visa Holders
 

Current 457 visa holders will no longer be able to apply for Permanent Residency under the Direct and Employer Nominated Transition Streams if their occupation is no longer on the long and medium term occupation lists. We recommend that current 457 visa holders take advantage of existing transition streams and permanent employer nomination schemes to lodge their application for permanent residency as soon as possible.  

TSS Program Replaces 457 Visa Program

From March 2018, the current 457 visa program will be abolished and replaced with the new TSS visa program. The TSS visa will be comprised of a Short-Term stream allowing stays of up to two years, and a Medium-Term stream allowing stays of up to four years.

Short-Term Stream
 
The Short-Term stream is designed for Australian businesses to fill skill gaps with foreign workers on a temporary basis, where a suitably skilled Australian worker cannot be sourced. The Shot-Term stream visa is renewable only once.  The STOL occupation list will apply for Short-Term Stream applicants. 

Medium-Term Stream
 
The Medium-Term stream will allow employers to source foreign workers to address shortages in a narrower range of high skill and critical need occupations, where a suitably skilled Australian worker cannot be sourced.  Only the Medium-Stream visa holders may renew their visas onshore and may apply for permanent residence pathway after working for three years in Australia. The MLTSS occupation list will apply for Medium-Stream visa applicants.


Tighter Regulations
 
For both streams tighter regulations will be introduced including:

• Increased Work Experience Requirements
• Higher English Language Levels Requirements
• Mandatory Labour Market Testing
• Set Australian Market Salary Rates
• Additional Character, Anti-Discrimination and Training Requirements.

Contact Nevett Ford Lawyer today for specific advice regarding your visa situation. 

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Changes to the Subclass 457 Visa program

Temporary Skill Shortage Visa (TSS visa) The Temporary Work (Skilled) (subclass 457) visa will be replaced with the completely new Temporary Skills Shortage (TSS) visa in March 2018.   Occupation lists: The occupation lists that underpin the 457 visa have been significantly condensed from 651 to 435 occupations, with 216 occupations removed and access to 59 other occupations restricted. The Consolidated Sponsored Occupation List (CSOL) is renamed as Short-term Skilled Occupations List (STSOL) and will be updated every six months based on advice from the Department of Employment. The other occupations list used for skilled migration, the Skilled Occupations List (SOL) is renamed as Medium and Long-term Strategic Skills List (MLTSSL).   Validity period: The maximum duration of 457 visas issued from this date for occupations that are on the STSOL will be two (2) years with an optional two-year extension allowed only once. Occupations on the MLTSSL will continue to be issued for a maximum duration of four (4) years.   Residency: The two-year short-term visa program will offer no prospect of permanent residency. The four-year medium-term visa holders will be able to apply for permanent residency if certain preconditions are met.   English Requirements: The four-year visas will require a higher standard of English language skills; a minimum of IELTS 5 (or equivalent test) in each test component. English language exemption salary threshold, which exempted applicants whose salary was over $96,400 from the English language requirement, will be removed.   Training benchmarks: Policy settings about the training benchmark requirement will be made clearer in legislative instruments. Training requirement for employers to contribute towards training Australian workers will be strengthened. Please ensure that your clients keep meeting this obligation (training benchmark A or B) as this is expected to be more carefully monitored.   Character: Provision of penal (police) clearance certificates will become mandatory.   Work Experience: Two-years work experience will be required for both visas.   Other documentation: In the majority of cases, mandatory Labour Market Testing (LMT) will be required, unless an international obligation applies. Employers must pay the Australian market salary rate and meet the Temporary Skilled Migration Income Threshold (TSMIT) requirements. A non-discriminatory workforce test to ensure employers are not actively discriminating against Australian workers.   Application fees $1150 for two-year visa and $2400 for four-year visas apply   Applications already lodged: 457 visa applicants that had lodged their application on or before 18 April 2017 with an occupation that has been removed from the STSOL, and whose application has not yet been decided, may be eligible for a refund of their visa application fee. Nominating businesses for these applications may also be eligible for a refund of related fees.

 

Please contact us for further clarity about how the changes may affect sponsorship, nomination and visa applications.

 

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457 Visa - Who can Sponsor?

Who can become a sponsor?

To become a sponsor, you must be able to show that your business:

• is a lawfully operating business
• has no relevant adverse information against your business.

Australian businesses must also demonstrate their commitment to employing local labour as well as non-discriminatory recruitment practices.
There are two ways you can become an approved sponsor:

• Option 1: Apply to be a standard business sponsor
• Option 2: Negotiate a labour agreement.

Option 1: Apply to be a standard business sponsor

The standard business sponsorship arrangement is the most common way to sponsor a skilled worker using the subclass 457 visa program. You must lodge an application to become a standard business sponsor.


You can have only one standard business sponsorship approved at any given time (that is, one sponsorship approval per legal entity) which is usually valid for five years. You can apply to extend your sponsorship at any time during this five-year period by lodging a variation application.




The requirements for approval as a standard business sponsor differ for businesses that are outside and in Australia.




Business in Australia
You must attest, in writing, that you have a strong record of, or a demonstrated commitment to employing local labour. You must also declare that you will not engage in discriminatory recruitment practices.




Make the attestation and the declaration about your workplace record in your sponsorship application form.


You must also meet training requirements. This means you must either:

• meet the training benchmarks if you have traded in Australia for 12 months or more
• have an auditable plan to meet the training benchmarks if you have been trading in Australia for less than 12 months.

Business outside Australia
You must be seeking to employ a skilled worker to either:

• establish, or help establish, a business operation in Australia
• fulfil obligations for a contract in Australia.

If your business does not yet have an operating base in Australia, you are not required to satisfy the training requirement.

Option 2: Negotiate a labour agreement

A labour agreement is a formal arrangement negotiated between an Australian employer and the Australian Government. You might be able to enter into a labour agreement if you are in one of the following situations:

• the occupation of the workers you want to employ is not listed on the Skilled Occupation Lists (Formerly Known as Form 1121i) or theAustralian and New Zealand Standard Classification of Occupations (ANZSCO)
• you are a recruitment company seeking to sponsor skilled workers to be on-hired to another businesses, and the occupations requested are on the Consolidated Sponsored Occupations List (CSOL)
• standard immigration options are not suitable.

You must be able to provide evidence that:

• there is a genuine and systemic shortage of skilled workers
• there are no suitably qualified Australian workers available
• you have a commitment to training Australians.

A labour agreement comes into effect when it has been signed by all parties involved in the negotiations. A labour agreement is typically valid for three years.


How to propose a labour agreement


You need, among other things, to:

• identify the relevant skills shortage in the business and why these vacancies cannot be filled by Australian workers (you need to show you have tried to recruit in Australia)
• specify the number of skilled workers needed from outside Australia
• specify the skill and English language requirements that relate to the nominated occupations. Semi-skilled occupations can be considered provided they are specialised and in demand
• include copies of correspondence showing that relevant stakeholders have been consulted.

You might be able to use a template labour agreement if there is one for your industry or your worker’s occupation. A template labour agreement is a set of standard parameters for similar employers: it does not guarantee an agreement will be approved.


If the template does not suit your needs, you might be able to negotiate an individual agreement.




Labour agreements include a requirement to provide training to Australian employees.
When you have a labour agreement in place, you are an approved sponsor for the term of operation of the agreement. You can then nominate skilled workers from outside Australia under the terms of the labour agreement.




You will also need to meet your sponsorship obligations and any other terms and conditions specified in the agreement.  If you breach the terms and conditions of your agreement, we could suspend or terminate it.




Standard business sponsors

To sponsor a worker as a standard business sponsor, you must:

• be a lawfully operating business
• have no relevant adverse information against your business.

If your business is in Australia, you must also:

• meet training requirements
• demonstrate your commitment to employing local labour
• not engage in discriminatory recruitment practices.

You can use Visa Entitlement Verification Online (VEVO for Organisations) to check the work entitlements of your prospective employees.

A lawfully operating business

You must be a lawfully operating business to apply to be a standard business sponsor. This applies to businesses both in and outside Australia.
To demonstrate this you must show both of the following:

• your business is legally established
• your business is actually operating.

A business that exists only on paper cannot satisfy this sponsorship requirement.
If you do not operate in Australia, you must be able to show that you need a skilled worker to:

• come to Australia to establish, or help establish, a business operation with connections with a business located outside Australia
• fulfil, or help in fulfil, a contractual obligation.

If your business is new, you can still satisfy this requirement if you can provide evidence that your business is in fact operating, even if this has been for only a short period of time.
Examples of the documents you can use to show that your business is legally established and operating are in the Document checklist.




If you operate a business under a trust arrangement you must provide details of the Trust Name and the Trust ABN when you complete the application form.  The application should be made using the name of the Trustee as it appears in the Trust Deed.




Details of the principals of your business such as Owners, Partners, Directors and major Shareholders should be provided when you complete the application form.




Contact us today for more information and assistance.

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