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Readying your organisation for 457 visa changes

Blogs Legislation and Compliance

By Charmaine Loratet, Director of People & Culture, Ascender

The government’s announcement on April 18 saw big changes to the 457 visa program that allows skilled migrants to work in Australia. Whilst the government had speculated scaling back the number of industries eligible to host 457 visa workers since 2013, the sudden and absolute axing of the program was unexpected.

As businesses and individuals alike seek to understand how the changes will impact them, HR professionals have an obligation to review all facts at hand, to prepare, act, and communicate such changes to their teams in a timely manner.

Firstly, it’s important to note that current staff employed under the previous 457 visa conditions will not be impacted. This is thanks to the grandfathering arrangement which exempts current visa holders from the new rules.

Prospective applicants and businesses sponsoring skilled migrants will, however, feel the greatest impact due to the significant amendments to the occupation list that underpins the 457 visa, from which 216 roles have been removed.

The 457 visa program will be replaced from March 2018 with a new category of visa, namely the Temporary Skill Shortage (TSS) visa. The TSS will be split into two streams; Short-Term (two years) and Medium-Term (four years). In the meantime, the government has released an updated list of the occupations eligible for the new visas, scaling back the list from 651 to 435 occupations, to be reviewed every six months.

Core industries that rely on these workers, including Information Technology, Hospitality and Leisure, are likely to feel the pinch in looking for the right skillset, or right seasonal availability of potential employees.

With further changes anticipated, it is vital that Australian businesses know how to prepare. From the boardroom to the HR department, businesses need to focus on risk mitigation, seeking advice from industry bodies, peers and agencies, communicating with current employees and readying for business impact.

Risk mitigation and employee communication

HR constantly assesses whether the right people are in place with the right skills to help the company compete, innovate and grow. In light of these visa changes, HR must assess who is on current 457 visas before taking the time to sit down with affected employees to discuss how the company will protect and support them in this volatile period.

Irrespective of the grandfathering rule, international employees will feel uneasy about the changes and are more likely to look to overseas roles or wish to return home. They may have hoped for a partner or family member to join them in Australia, so working through the changes to permanent residency should form part of this conversation.

Companies with international offices should also look to field queries from employees abroad, including those whom travel to Australia for short-term projects. Maintaining transparency and open communication lines regarding these changes will help reaffirm trust in your organisation and show that you have staff interests at heart.

Industry advice

Working through the impact of these visa changes will require collaboration with key industry bodies, peers, and government agencies. Unions claim the changes are mostly ‘cosmetic’, while some industries have pronounced that it will make it more difficult to secure experienced individuals, potentially impacting commercial growth and innovation.

HR leaders must moderate between these macro influencers and their staff to ensure they’re providing the right level of information, at the right time to their staff.

As the changes come into full effect, HR will likely need to work with legal professionals throughout the hiring process, to mitigate risk and ensure compliance with the new visa classes.

Business impact

The TSS visa will be roughly equivalent to the current 457 (sans the roles that have been removed from the list), but it will be harder to get. The TSS will have higher requirements than the current 457 program, including a ‘higher standard of English’, a ‘proper police record and criminal check’, a two year work experience requirement, and ‘mandatory labour market testing’.

Holders of the new visa will not be as easily able to apply for permanent residency as 457 visa holders are. This may cause issue when recruiting from overseas for newly emerging or highly specialised roles.

In the recent federal budget, a new foreign skilled worker levy was unveiled for employers. Businesses with a turnover of less than $10 million will have to make an upfront payment of $1,200 for every year they employ someone on a TSS visa, and make a one-off payment of $3,000 for each employee they sponsor for a permanent skilled visa.

Businesses with a turnover over $10 million per year will pay $1,800 annually for staff on TSS visas, and a one-off payment of $5,000 for each employee on a permanent skilled visa. The compulsory payments will be spent on the training and development of Australian apprenticeships and traineeships in high-demand occupations.

Businesses that work within this framework to assess the visa changes will be better prepared for the TSS as it comes into play in March 2018. Maintaining open and collaborative communication lines now, and in the coming months, will be imperative for ensuring employee peace of mind. Working with wider industry bodies, peers and government agencies, will also ensure HR is best equipped to assess skill shortages, fill possible vacancies and leverage the right people for these roles.

This article was originally published on HC Online. To access the article, please click here.

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