Global mobility and the Temporary Skill Shortage visa one year on

Guest post by Chris Spentzaris, Fragomen

Challenges businesses faced in the first year of TSS visa and outlook for the future

On 18 March 2018 Temporary Skill Shortage (TSS) visa replaced Australia’s flagship 457 visa. The most significant overhaul of Australia’s principal work visa program for two decades, the new TSS regime reflects a general trend in Australia’s immigration program of tightening the visa criteria and on one hand, adding layers of complexity for some applications and on the other, streamlining low-risk applications with auto-approval of certain applications from trusted sponsors. With streamlined processing, the Department of Home Affairs (the Department) is increasingly focusing on compliance measures to enhance the integrity of the temporary work visa program.

One year after the introduction of the TSS visa, we are reviewing further changes to the TSS visa program, as well as alternative visa pathways businesses are considering in light of a more stringent and costly TSS visa program. We are also looking closely at the current Labour Market Testing requirements as this is one area which leads to nomination refusals.

The TSS visa program at a glance

The introduction of the TSS visa brought a new set of additional requirements to the work visa program. The key changes included:

• Tighter Labour Market Testing (LMT)
More stringent LMT requirements came into effect on 12 August 2018. Businesses must now evidence their efforts to find a suitable Australian worker for the nominated position, unless exempt. Exemptions only apply where it would be inconsistent with Australia’s international trade obligations as follows:
o Nationality exemption, which applies to certain passport holders or permanent residents of certain countries;
o Intra-company transfer exemption, where individuals are transferring from an associated entity based in certain countries;
o Executive or Senior Manager exemption; or
o Renewal exemption, where the individual has been working in Australia for two years with the nominating employer.

Alternative evidence (i.e. other than by advertising) may be accepted by the Department in limited circumstances where by way of a separate submission, the business can explain the reasons why the individual’s skills are unique, and there are therefore no suitably qualified and experienced Australians readily available to perform the role. These circumstances include (but are not limited to) scenarios where the nominee:
o has an internationally recognised record of exceptional achievement in their field;
o is an intra-company transferee (who does not fall within LMT exemption above); or
o will receive earnings at or above $250,000.
If LMT is required, it must be undertaken in the prescribed manner otherwise the nomination will be refused. The current legislative requirements for LMT are as follows:
o must be completed in the last four months prior to the nomination lodgement and after any redundancies or retrenchments of Australians from positions in the nominated occupation, in the business of the sponsor or an associated entity;
o must comprise at least two advertisements published for at least four weeks in one of the prescribed media including a national recruitment website such as or Seek, national print media, or if the sponsor is accredited, on business’ website;
o the advertisement must be in English and include the title or description of the position, skills or experience required for the position, name of the sponsor or recruitment agency and the annual earnings for the position (which could be a salary range), unless the earnings will be greater than $96,400pa).
o It is critical that the nomination application form is completed correctly and relevant evidence of LMT, which meets the above requirements, is provided with the application. Where advertisements do not meet the prescribed criteria, the nomination application will be refused in which case the Skilling Australians Fund (SAF) levy would not be refunded.
o The revised LMT requirement can significantly affect the lead time to having your assignee on the ground in Australia and requires engagement with recruitment teams and hiring managers to manage expectations. It is also critical that recruitment teams are aware of strict advertising requirements and evidence required for the nomination application.

• Introduction of SAF levy on 12 August 2018
The SAF levy replaced training benchmarks and requires payment of $1,200 per year (business turnover of less than $10 million) or $1,800 per year (business turnover of at least $10 million) at the time of lodgement of the TSS nomination application. The SAF levy also applies to permanent residence visa applications sponsored by businesses (a one-off amount of $3,000 and $5,000 depending on business turnover).

While training benchmark no longer applies, businesses have an obligation to meet the training obligation for each full year of business sponsorship prior to the introduction of SAF levy, hence it is important that records of training spend are maintained in case your business is monitored by the Department.

• Changes to occupations lists
The TSS visa program continues to have three occupations lists namely Short-term Skilled Occupation List (STSOL), Medium and Long-term Strategic Skills List (MLTSSL) and Regional Occupation List (ROL) with caveats applying to certain occupations restricting access to TSS visa for certain businesses / positions. Businesses must be mindful of restrictions that apply to nominated occupations on the STSOL relating to the length of TSS visa (maximum two years) and one onshore visa renewal only. Unless transitional provisions apply, there is also no employer-sponsored permanent residence pathway (ENS/RSMS) for occupations on STSOL which is an important consideration in terms of talent attraction and retention strategies.

• Genuine Temporary Entrant (GTE) requirement
GTE is a new requirement for STSOL occupations and will affect the ability of some foreign workers to apply for a further TSS visa onshore. Those affected include individuals who have:
o held more than two TSS visas in STSOL occupations in the last five years; or
o been in Australia on any visa for a period of four years or more AND the Department has certain concerns that the individual does not have an intention to remain in Australia temporarily in line with the purpose of the TSS visa.

With tightening of TSS visa criteria, limited access to a four-year TSS visa and permanent residence for certain occupations and the significant increase in cost of sponsoring foreign workers for a TSS visa, there has been a noticeable drop (by over 25%) in the use of the 457 and TSS visa program in the 2017/18 financial year. This trend is expected to continue as businesses look to alternative visa programs to fill the genuine vacancies in their business and retain key employees.

Alternative visa programs

Training Visa (subclass 407)
Allows individuals to take part in workplace-based occupational training activities where it is required to get occupational registration, membership or licensing, or to improve their skills in an eligible occupation, or for capacity building overseas. This visa requires the business to be approved as a temporary activities sponsor and nominate the individual for a visa. No SAF levy applies.

General Skilled Migration (GSM) program
GSM is a points tested program which allows applicants aged under 45 to apply for permanent residency independently from their employer. GSM has a few temporary and permanent visa options and eligibility is limited to occupations on relevant occupations lists. States and Territories can nominate individuals for visas under GSM program and each State or Territory has a separate list of occupations in demand in that State or Territory. The program works on the basis of Expression of Interest which is submitted through the Department’s system SkillSelect and an invitation to apply for a visa is required before an individual can submit an application for a visa. No SAF levy applies.

Labour Agreement
A sponsorship agreement individually negotiated between an employer and the Australian government allowing the employer to sponsor visa holders in situations where:
• the occupation is not eligible to be sponsored for TSS / ENS (i.e. off list occupations);
• the occupation is on the STSOL, but there is a demonstrated long-term need for the role;
• the occupation is on the Regional Occupation List, but there is a need to sponsor them in metropolitan areas;
• concessions are required to standard English, skill or TSMIT requirements under the TSS / ENS programs.

In all cases, the applications will need to be supported by a strong business case as to the nature of the concession sought, demonstrated by independent data, including Labour Market Testing. Union consultation is necessary.

Global Talent Scheme (GTS)
A new Labour Agreement pathway intended to help businesses fill highly-skilled, innovative and cutting-edge positions that cannot be filled from the domestic labour market and which cannot be filled under the general TSS visa program. There are two streams that comprise GTS, the Established Business Stream for accredited sponsors to sponsor highly skilled individuals, and the Start-up Stream for start-up businesses in the technology space or STEM fields to sponsor highly skilled individuals. The agreement is valid for five years, up to 20 positions per year (or up to five for a Start-up Stream) and allows the grant of a four-year TSS and access to Permanent Residence.

Other important considerations

Accredited Sponsorship
Businesses should also consider obtaining Accredited Sponsorship, which gives access to priority processing times of approximately one or two weeks, streamlined processing and auto-approval for low-risk nomination applications and sponsorship renewals. Accredited sponsors can also advertise on their website as part of their LMT effort. If you have not done the assessment of your eligibility for Accredited Sponsorship, this may be a good way to proactively manage the TSS visa program.

Focus on Immigration Compliance
The Department continues its focus on ensuring sponsors use the TSS visa program in line with its purpose and comply with the sponsorship obligations. As part of its compliance program, the Department also reviews business use of the other visa categories such as Temporary Work (Short Stay Specialist) (subclass 400) visa and Visitor (subclass 600) visa to ensure they are not used to circumvent the more stringent requirements of TSS.

If you have any concerns with regards to your immigration compliance, or have been meaning to do a compliance health check, now is the right time to ensure your business is compliant in its use of the various temporary visa programs and ready for a Departmental audit or onsite visit.

Further information
As with any immigration changes, there are a number of important considerations that need to be taken into account in terms of talent, workforce and business planning. Be proactive in initiating those discussions to make sure your business has the right action plan. Having a trusted immigration adviser that can partner with you to lead you through these changes and establish the right processes from the outset is critical.

For further up to date information on Australian Immigration Reforms, we invite you to Fragomen’s dedicated TSS reforms page.

If you would like assistance, please do not hesitate to contact me, or our TSS reforms team at [email protected].

Information in this article is provided for general information only. The information does not provide advice for your specific needs and cannot, therefore, be relied upon. Please seek professional guidance for your specific circumstances.