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With 457 visas out and TSS visas in, what does HR need to do?

A review of the changes to skilled migration visas, and what this means for employers.

Last April, the Prime Minister announced that the 457 visa would be replaced by a new Temporary Skill Shortage (TSS) visa in March 2018. That date is fast approaching.

According to November 2016 data from the Australian Bureau of Statistics, of the 1.7 million recent migrants and temporary residents in Australia, 65 per cent are employed –  that’s roughly one million people.

On these figures, employment of migrants by Australian organisations involves a great many employers and a bewildering amount of regulation. A lot of that happened through the 457 visa system.

Occupations being cut

Since the PM’s announcement, more than 200 occupations have been cut from the various lists of occupations from which employers can select migrant workers.

The remaining occupations have been divided into a Short-term Skilled Occupations List (STSOL) and a Medium and Long-term Strategic Skills List (MLTSSL).

Other changes include caveats and requirements imposed on certain occupations relating to things such as salary, work experience and location.

In addition, the English language exemption for workers in Australian companies with salaries over $96,400 has been removed, police clearance certificates are now mandatory, and the Department of Home Affairs (formerly Immigration) has committed to ‘naming and shaming’ employer sponsors who breach their obligations.

Some features of the new TSS visa are set out in this table.

 457TSS (STSOL occupations)TSS (MLTSSL occupations)
Work experience requiredNone, other than occupation-specific requirements2 years + occupation-specific requirements2 years + occupation-specific requirements
Labour market testing (e.g. job advertising)Only for certain occupationsAll occupations, subject to international obligationsAll occupations, subject to international obligations
Non-discriminatory workforce test to ensure employers are not actively discriminating against Australian workersNoneApplies (unclear how this will be implemented)Applies (unclear how this will be implemented)
Training Requirement Expenditure equivalent to 1 or 2% of payrollContribution of $1200-$1800 a year per worker to Skilling Australians FundContribution of $1200-$1800 a year per worker to Skilling Australians Fund
DurationUp to 4 yearsUp to 2 yearsUp to 4 years
RenewalUnlimitedOne onshore renewal permitted for up to an additional 2 yearsUnlimited
EnglishEquivalent of IELTS 5 overall, with a minimum of 4.5 in each test componentEquivalent of IELTS 5 overall, with a minimum of 4.5 in each test componentEquivalent of IELTS 5 overall, with a minimum of 5 in each test component
Permanent Residency (PR)Transitional pathway to PR after 2 yearsNo transitional pathway to PRTransitional pathway to PR after 3 years

What do employers need to know?

Potential employer impacts of the proposed changes from next month include a reduced pool of talent from which to choose, with fewer eligible occupations and other factors that could make it harder to sponsor staff. In addition, for occupations on the short-term skilled occupations list (STSOL), potential recruits might think twice before relocating their families to a country with no clear pathway to a permanent visa.

With Home Affairs announcing an intention to publish the names of sponsors who fall short of their obligations, companies that fail to comply risk a negative impact on reputation that could be very damaging.

On the other hand, the proposed changes also come with unexpected benefits for employers. For example, for those occupations on the medium to long-term strategic sills list (MLTSSL), recruits will need to remain with the same employer for a minimum of approximately 4 years (taking into account processing times) if they wish to transition to permanent residency. This may be a welcome change for employers in high turnover industries, such as hospitality, where substantial savings can be made in terms of the time and cost associated with recruiting and training new staff.

What can I do?

Given that the new regulations are fast approaching, HR practitioners who deal with recruitment can do three things.

The first is to prepare by ensuring you understand your obligations, and that your compliance systems and records reflect that understanding.

The second is to consider alternative options.  For example, where an occupation is not eligible for a TSS visa, ask yourself these questions:

  • Are there any other eligible occupations that might legitimately fit?
  • Would a 407 Training Visa work?
  • Would a 417 Working Holiday Visa or a 462 Work & Holiday Visa be useful, noting that they only last six months with a single employer?
  • Is a 500 student visa a possibility, mindful that it only allows part-time employment?

Where an occupation is not on the MLTSSL, some alternative options for permanent residency include the following:

  • Are there any eligible occupations that might legitimately fit?
  • Are 186/187 Direct Entry stream visas eligible? (but only before March 2018)
  • Are you in an industry that might permit a Labour Agreement?
  • Are you in a regional area where an 887 visa (via 489) might be appropriate?

A third course of action could be to lobby through AHRI, whose members collectively represent a significant proportion of employer sponsors. The Department of Home Affairs is currently taking submissions, and any comments you would like to make could be used to argue a case.

For example, even though the present window is fast closing, the occupations list will be reviewed every six months. AHRI is open to hearing from you about making submissions for any particular occupations you think should be on either list.

In the immediate term, you might like to post a comment here or respond to this brief AHRI questionnaire to express a view anonymously.

Ariel Brott is Co-Convenor of AHRI’s International HR Management Network committee. He is an Accredited Specialist Immigration Lawyer and leads the practice at Global Mobility Immigration Lawyers

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Hi. Is the pathway to PR data correct in the table? It seems to contradict what is stated further down in the article.

Otherwise a useful summary


Hi, my question is the same as Kim. There is a contradiction in the article relating to Permanent Residency.

Could you please confirm if there is a path to PR for MLTSS occupations


The pathway to PR with the short term TSS is incorrect – this is for the medium term visa after 3 years

Jackson Taylor
Jackson Taylor

Yes, the article has a small error where the pathway to PR for the STSOL occupations and MLTSSL occupations are reversed.

It is also worth noting that the Department of Immigration have announced an intention to enable people who held a 457 visa, or had applied for one, as at April 2017 to access permanent residency under the current Temporary Residency Transition stream (ie, 2 years full time employment with the employer) regardless of occupation. This is a statement of intention only and shouldn’t be relied upon until the legislation is released.

MARN 0747944

Girard, HRMonline
Girard, HRMonline

Hi Everyone,

Thanks for picking up on the error. It has now been corrected.

Kind regards,

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