457 visa changes : what it means for employers


457 visa changes : what it means for employers

Proposed changes to the 457 visa system will impact on HR practitioners and recruiters. Mike Toten explains.


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The federal government’s proposed changes to what is popularly known as “the 457 visa system” – and also to the employer-sponsored skilled migration program – has attracted a lot of media coverage and a fair amount of nationalistic rhetoric (eg “protecting jobs for Australians”).

But what will it mean in practical terms for HR practitioners and recruiters?

The proposed changes were outlined in a previous article and some reactions from key stakeholders were summarised in another article.

What happens from here?

The government has to pass legislation to enact most of the changes. It appears possible the Senate will refer the legislation to the Standing Committee on Education and Employment for review, but the position of many senators was unknown at the time of preparing this article. 

Some changes came into effect on 19 April 2017, notably the reduced list of eligible occupations, which will be updated every six months. Others are scheduled to commence on 1 July 2017, others by 31 December 2017, and the remainder on 1 March 2018. The latter is the date when the Temporary Skills Shortage (TSS) Visa is scheduled to replace the current 457 visa.

Of the 200+ occupations that have been removed from the eligibility list, those that may affect recruitment of HR staff include human resources advisor, workplace relations advisor, procurement manager and safety inspector. From now on, employees for those occupations need to be sourced locally.

Employer testing retained

Perhaps the most controversial aspect of the proposed new arrangements is the retention of initial labour market testing by employers instead of by an independent testing authority (such as a body set up within the Department of Immigration and Border Protection). The employer merely has to provide evidence that it advertised the job locally but was unable to find any suitable employees. 

Critics have argued that some employers have manipulated the system by making only token attempts to advertise the job locally, because it was more expedient for them to hire someone on a 457 visa. For example, the remuneration and employment conditions were made too unattractive to interest potential Australian applicants or the job was not widely advertised.

“Skills shortages” are often regional rather than Australia-wide. For example, they may exist in some capital cities but not in others, nor in all rural areas. A shortage has to be across-the-board and persistent, not confined to individual areas or employers who may have their unique “recruitment problems” (eg due to bad reputation or unattractive location).

Some critics have added that the department really needs independent advice on where skill shortages exist and why they exist, whereas some employers are only looking at the issue from their own, usually short-term, needs. Furthermore, employers’ needs and the national interest are often not the same thing. 

Until the legislation appears or the department issues more detailed information, it is not clear what changes will be made to the current testing system and the process of investigating employers’ claims they could not fill the vacancy locally. The testing will have to be “non-discriminatory” against Australian employees and job applicants, but no further details are currently available.

Some commentators have claimed that an independent testing system, as used in countries such as the UK, would require substantial resources to implement.

Other issues requiring clarification

We will also need to await further information on the following issues:
  • Reference in the announcement to “strengthened requirement [for employers] to contribute to the training of Australian workers” – a fact sheet (see below) implies that further details will be released by 1 July 2017 and may require further legislation
  • Reference to “concessions for regional employers” , which may be varied from the concessions currently available
  • The renewal process that applies to two-year short-term TSSs
  • The higher education sector has queried whether it will be able to hire people who are highly qualified (eg with PhDs) but who lack the required “two years experience in the occupation”.

What actions will recruiters now have to take?

Recruiters and HR practitioners should prepare to take the following steps:
  • Monitor the phasing in of the changes (if they are enacted) and ensure their organisation complies with the requirement deadlines of 1 July 2017, 31 December 2017 and 1 March 2018.
  • Review applicant sourcing and advertising processes to ensure compliance with labour market testing requirements. For example, remuneration offered should reflect actual market rates, not merely compliance with minimum prescribed market salary rates, and the search process should be thorough and realistic, not contrived to “encourage” failure (to recruit local employees). As noted above, testing must also be non-discriminatory.
  • Understand the distinctions between short-term (two-year) TSSs and medium-term (four-year) ones. These include type of occupations covered and the level of jobs they apply to – generally the four-year TSSs relate to more senior roles.
  • Ensure recruiters are aware of all new requirements, including the reduced maximum age limit for applicants of 45, the minimum level of job experience they are required to possess, higher English language proficiency levels, alterations to the labour market testing process, new administrative procedures (eg collection of tax file numbers and provision of “mandatory penal clearance certificates”), etc. Changes to the list of eligible occupations, the labour market test and minimum remuneration amounts may occur over time, so set up processes to monitor those.
  • If relevant to your organisation, monitor the half-yearly updates to the list of eligible occupations.
  • Review processes to assist employees when the term of their visa expires, for example to assist them to apply for permanent residency or to assist them (and their family members) to return to their home country. Note that the changes will extend the qualifying period before employees can seek permanent residency. 

Stay tuned

WorkplaceInfo will monitor this issue as developments occur – for example, as more information is released about administration and employer requirements. We will report these developments in future articles.

The Department of Immigration and Border Protection has so far issued two fact sheets summarising the changes. Factsheet 1 covers the change from 457 visas to TSSs, including a timetable, and Fact sheet 2 covers changes to the employer-sponsored skilled migration program.
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