The Tyro Blog

11 December 2017 - 4 min read

Business Strategies

Hiring for the holidays? See how the 457 changes impact you, and your staff

During the busy holiday period, most retail stores, hospitality venues and tourism businesses in Australia need to consider hiring additional staff to cover this peak time.

Whilst it is great to encourage young Australians to take on these roles, many simply do not want them, or they do not have the skills to take on these roles. Which means businesses often need to look to foreign workers to fill any gaps in their rosters.

Back in April 2017 Malcolm Turnbull announced that he was scrapping 457 Visas. The visas which bring temporary foreign workers to Australia.

What effect has or will this have on your business this holiday season and beyond?

The 457 visa scheme was introduced back in 1996-97 and has seen more than one million migrants granted temporary visas to work in Australia.

The announcement on 18 April was that the 457 visa would be abolished, but those already holding these visas would be unaffected.

It is being replaced with two new visas, with changes being rolled out from the announcement until March 2018.

A reduction in the eligible occupations

Immediately following the announcement, occupation lists which provide the jobs for which the visa applied was condensed. From 651 to 435 with restrictions placed on a further 59 other occupations.

These jobs are reviewed every 6 months. A ‘traffic light’ management system is currently being trialed, were before the list is updated occupations are flagged. Occupations in green will remain, blue occupations will be introduced for sponsorship and red occupations will be removed.

The aim of this system is to help businesses better manage their resources into the future. Occupations flagged for potential removal in January 2018 include Accommodation Managers, Hair or Beauty Salon Managers, Recruitment Consultants and Building Associates.

The hardest hit sectors

Occupations on the new Short-term Skilled Occupations List will only qualify for the new Temporary Skilled Shortage (TSS) visa which will be limited to two years and will not lead to possible permanent residency.

The sectors who are the hardest hit from these initial charges are higher education, technology, Fast Food, Take Away, Café and Production Kitchens. As some professions in these areas have now been taken off of the Skilled Occupation list and will only qualify for the Temporary Skilled Shortage Visa.

Other occupations such as chefs are still on the Skilled Occupation list, which is now, called the Medium and Long-term Strategic Skilled List (MLTSSL).

With the MLTSSL visa applicants will be entitled to 4 years working visa where they can apply for permanent residency after three years as opposed to the previous two years.

Further upcoming changes

Additional restrictions include the English language salary exemption threshold being removed, criminal clearance certificates needing to be provided and applicants to be less than 45 years of age.

From 31 December 2017 Tax File Numbers will be required to be collected and matched to ATO records to ensure visa holders are paid according to their nominated salary. Which is designed to stop foreign workers being paid below national award rates.

Then in March 2018 the two new visas (TSS and MLTSSL) will be formally introduced with both schemes having the following requirements:

  • relevant work experience;
  • labour market testing will be mandatory;
  • employers must pay the Australian market salary rate and meet the Temporary Skilled Migration Income Threshold set at $53,900 as at 12 April 2016.
  • mandatory penal clearance certificates;
  • non-discriminatory workforce test where employees must advertise jobs before filling them with foreign workers
  • employer contribution towards training Australian workers.

Impact on business

The changes are likely to result in greater costs and time for businesses when they look to hire international workers. it may be harder to find eligible temporary visa workers as they now face stricter English language and work experience requirements.

As a result, employers may need to consider upskilling current Australian staff or consider how they can reduce the increased administrative costs that will be associated with hiring foreign workers moving forward.

In the Federal Budget, a new foreign skilled worker levy was proposed for employers. Which range from a cost of $ 1,200 to $5,000 annually for each employee on a TSS or permanent skilled visa.

Is your business ready for the upcoming changes?

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