The End of the 457 Visa

THE END OF THE 457 (OR IS IT?)

May 30, 2017

The end of the 457 (or is it?)

Article courtesy if Abacus Visa Immigration

For a more comprehensive list of changes to the 457 visa, the new TSS visa and their impact on visa applicants and employers, read the Newsflash here.

Our string of past reports (in December 2013, March 2015, April 2016 and August 2016) on the Temporary Work (Skilled) visa (Subclass 457) program shows the never-ending saga of successive governments skirmishing over regulations that allow tens of thousands of overseas workers to call Australia home, while letting employers more flexibly manage labour shortages.

Having criticised Labor in 2013 for tightening the screws on 457s (such as introducing labour market testing, raising training requirements and generally making the visa application process more onerous), the Coalition’s decision to axe the program altogether was a surprising about-face. It seems the government has finally bowed to persistent claims that the 457 scheme has been exploited to the point of becoming a colossal failure.

The changes

The 457 will be replaced with a new visa, called the Temporary Skill Shortage (TSS) Visa. It will consist of two streams: one with a two-year limit, the other a four-year limit. Which stream skilled workers fall into depends on the occupation being applied for. The new program will come into force in March 2018. However, some changes were immediately effective from 19 April 2017, meaning current and prospective 457 visa holders are already feeling its effects.

The TSS visa differs in several key aspects: tougher English requirements, criminal record checks, a two-year work experience requirement and stricter labour market testing for employers. Under the four-year visa stream, 457 visa holders hoping to secure permanent residency will have to work for three years, instead of the current two. Under the two-year visa stream, there will be no pathway to permanent residency.

Unavoidably, the restrictive nature of the new TSS program will force employers to consider hiring skilled overseas workers using alternate visa pathways eg. the Temporary Work (Short Stay Specialist) visa (Subclass 400), the Training (subclass 407) visa and other temporary activity visas.

An awkward balancing act

While the Coalition was busy touting the ‘abolishment’ of the 457, those who looked under the hood of the policy change have noticed the TSS visa bears a suspicious resemblance to the 457 it is meant to replace.

Many of the over 200 jobs struck from the existing occupation lists were laughably obscure (goat headers, historians, potters etc.), while the two industries using the most 457s (tech and hospitality) remain largely untouched.
Still, sectors that have been affected (including science and tech, research, mining and retail) have been loudly voicing their complaints. With a review of the occupation lists to take place on 1 July, industry pressure may cause certain banned occupations to make their way back onto the lists.
Critics take issue with the fact that mandatory labour market testing (currently required for some occupations under the 457) will remain employer-conducted, instead of carried out by an independent body.
To many businesses, however, the TSS visas’s strengthened labour market testing, training and sponsor obligations do little to help the issue of real skill shortages.

All in all, this awkward balancing act has placed the government at loggerheads with representatives from both sides of the issue. For unions, the TSS visa is simply the 457 visa 2.0; it doesn’t go far enough to address the supposed loopholes disadvantaging local workers. By contrast, many industry spokespeople are painting the government’s move as ‘overkill’ and pandering to populist whims.

What we still don’t know

The government has said those who held 457 visa holders prior to 19 April 2017 will not be impacted, unless they apply for a new 457 visa after 1 July 2017. Still, there are important questions that remain unanswered. Prime among these is whether – and how – the rule changes will apply to existing 457 visa holders applying for permanent residency through the Temporary Residence Transition (TRT) stream of the Employer Nomination Scheme (Subclass 186) (ENS visa)