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457 visa changes

Skilling Australians Fund

There have been significant legislative changes affecting visa holders and applicants of both the permanent Skilled Migration Program and the Temporary Skilled Migration Program (often known as the 457 visa program) and these continue throughout 2018.  However there are also changes forecasted for employers who participate in these programs, specifically in terms of an increased economic contribution into a newly formed fund designed to increase the skills, training and vocational education of Australians.

A Commitment to Training – The Existing Requirements

At present, in order to be an approved sponsor for the purposes of the 457 visa program (or support an application for permanent residency through the employer sponsored program), an organisation has two ways in which they can demonstrate their commitment to training. 

The first option is to demonstrate that they are spending at least 1% of their annual payroll on activities for the benefit of their employees that can be appropriately characterised as having a learning outcome.  These requirements come with a few caveats including:

  • The training outcomes must fit the size, scope and nature of the business;
  • The training must be for the benefit of Australian employees; and
  • The expenditure must not be for family members of the principals of the business. 

This leaves some discretion in the hands of employers as to how they want to engage and develop the skills of their existing employees.  For example, one of the most direct and obvious ways in which it is possible to meet the training obligations is for an employer to take on an apprentice or trainee.  The wages paged to that individual are then directly attributable to the employer’s commitment to training.

In the event a particular employer cannot meet this requirement there is an alternative option whereby a contribution to the value of 2% of the organisation’s annual payroll can be made into an Industry Training Fund (such as TAFE organisations). 

Skilling Australians Fund – The New Requirements

Commencing in March 2018, a new fund will be set up to assist with vocational education and training for Australians – the Skilling Australians Fund.  While the details of the funding model are currently being finalised, it will in part be funded by organisations who are participating in the temporary and permanent employer sponsored programs.

Organisations who have a need to source labour from abroad will be categorised as either small or large organisations depending on whether their turnover is below or above $10 Million.  From there they will be required to pay a levy per applicant into the Skilling Australians Fund.  From the information that has been announced, the levy will be payable in full at the time of the nomination, that is before a decision has been made on the nomination or the visa applications. 

The details of the levy payable are as follows: 

Table One:  Overview of Skilling Australian Levy of Organisations participating in Economic Migration Programs

Migration Program     

Temporary (457 / TSS) Visa Program
- Small Organisation: $1,200 per year per visa applicant
- Large Organisation: $1,800 per year per visa applicant

Permanent Visa Program
- Small Organisation: $3,000 per year per visa applicant
- Large Organisation: $5,000 per year per visa applicant

Should you have any questions about the above information or if you want to discuss how your business can access these arrangements in more detail please do not hesitate to contact us for a confidential discussion on (03) 9614 7111 on send us an on-line enquiry.

 

457 News Update: New training levy (March 2018)

The existing Subclass 457 training benchmark requirements will cease in March 2018, with a new Skilling Australians Fund (SAF) levy to be paid instead at the time a Nomination is lodged for the new Temporary Skill Shortage (TSS) visa, as well as the subclass 186 and 187 visas.

Based on currently available information the amounts payable per applicant are set out as follows:

·         The charge will be calculated according to the number of years set out in the nomination.

·         A small business (annual turnover of less than $10 million) will pay $1,200 per nomination per year for a TSS visa.

·         A large business will pay $1,800 per nominee per year.

·         If the employee is applying for a 4 year TSS visa, this will require the 4 annual payments to be made at the time of application. If a large business nominates an employee for a 2 year TSS visa, the business must pay the annual amount for 2 years.

·         For permanent visas, the charge will be $5,000 per applicant for a large business, and $3,000 per applicant for a small business.

·         The maximum amount of the nomination training contribution charge is capped at $8,000 for nominations relating to a temporary visa, and $5,500 for nominations relating to permanent visas, for the financial year commencing 1 July 2017.

·         Nomination contribution charges to be made in later financial years will be indexed in line with CPI.

It is still unclear but it is likely that this fee cannot be passed on to the visa applicant.

For further information and advice please contact Nevett Ford Lawyers:

Telephone: + 61 3 9614 7111

Email: melbourne@nevettford.com.au

457 Visa Update – October 2017

As previously flagged in one of our earlier updates, the 457 visa program will transition to the Temporary Skills Shortage (TSS) Visa from March 2018.  It is expected that there will be ongoing changes to the requirements businesses need to meet in order to nominate visa holders. This update relates to some of the recent changes for businesses and 457 visa holders.

Changes to Market Salary Rate Requirements

The Department of Immigration & Border Protection (DIBP) has strengthened ‘market salary’ requirements, meaning employers will need to provide additional documentation to show they are paying their visa holders equivalent market salary rates to local workers.

In an initiative to prevent visa holders from being exploited where there is no Australian-equivalent employee, employers will need to:

§  Provide a written statement outlining how they have determined the pay for an equivalent Australian worker

§  Prepare references to the job outlook and prospects of the role in the Australian market.

This extra documentation is required in addition to the usual evidence requirements businesses must show to ensure Australian market salary rates have been met.

Labour Market Testing Evidence Arrangements

Businesses who have lodged a nomination application on or after 1 October 2017, will need to provide additional evidence to show they have adequately tested the local labour market.

The main changes for businesses are as follows:

§  A copy of relevant advertisements will need to be provided, including evidence of the duration of the advertising period;

§  Receipts for any advertising fees paid to be submitted at the time of application;

§  Advertisements also need to be nationally accessible, for example through a service such as SEEK, MyCareer, LinkedIn, Gumtree and alike;

§  The Domestic Recruitment Table will no longer be accepted by DIBP as a way of demonstrating that the Australian labour market has been tested.

 

When the 457 visa program transitions to the Temporary Skills Shortage (TSS) Visa in March 2018, businesses may need to meet additional labour market testing requirements. Further information is expected from DIBP in coming months.

The DIBP states that these changes aim to ensure overseas professionals are nominated for positions which demand skills and experience that are difficult to source locally.

Permanent Residence Prospects for Employees Currently on a 457 visa

We can confirm existing subclass 457 visa holders or applicants as at 18 April 2017 will continue to have access to an employer sponsored pathway to permanent residence, however the policies governing the transitional provisions are yet to be confirmed by DIBP. The DIBP has stated it hopes to advise of this before the end of the year.

Managing the 457 visa changes

To support businesses throughout the 457 changes, Nevett Ford Lawyers can advise your business on how to manage and prepare for the additional requirements to nominate visa holders.

Contact us today and speak to one of our team of immigration lawyers and registered migration agents for more information:

Telephone: +61 3 9614 7111

Email: Melbourne@nevettford.com.au

457 Visa - Training Benchmark changes

Changes continue to be rolled out by the Department of Immigration & Border Protection (DIBP).  A recent change relates to the training benchmarks that 457 business sponsors are obliged to meet - this article explains how the changes impact employers.

Benchmark A - Payments to a Training Fund

This involves paying 2% of payroll to an industry training fund. From July 2017 payments may be made to one of the following:

  • Industry training fund
  • Fund managed by recognised Industry Body
  • Scholarship fund operated by Australian TAFE or University.

The following types of expenditure are now not eligible:

  • Funds operated by RTOs or private individuals
  • Funds paying commissions or offering refunds if application fails

The main impact of this change is that the previous practice of private education providers accepting payments for Benchmark A will be discontinued.

Benchmark B - Expenditure on Training Australians in the Business

This involves spending 1% of payroll on training Australians in the business. From July 2017 payments may include:

  • Apprentices, trainees or recent graduates
  • RTO's delivering face-to-face training which contributes to formal qualification
  • e-Learning or training software
  • Formal courses of study + associated costs (e.g. travel)
  • Training officers - must be "sole role" of the employee (to train other employees in the business)
  • Attending conferences for Continuing Professional Development (CPD).

 

The following types of expenditure are now not eligible:

  • Salaries of staff attending training
  • Membership fees - this was previously counted
  • Books, journals or magazine subscriptions - this was previously counted
  • Conferences for purposes other than CPD
  • Hiring a booth at trade show, conference or expo On-the-job training - previously, structured on-the-job training could be counted in some circumstances
  • Training not relevant to business' industry - it is not clear how closely related the training must be to the industry
  • Training of principals or family members - previously, training of family members could be counted providing it was also made available to other employees
  • Induction training.

Based on current information, it appears that payment of external providers to deliver training for Australian employees, is excluded unless it leads to a formal qualification. This would form the bulk of the training expenditure of most businesses and so many will need to restructure their training to comply with the new Benchmark B. Once further clarity is available we will let you know.

What is also unclear at the moment is whether 457 business sponsors who have been calculating their training benchmark expenditure on the previous training benchmark provisions will be deemed to have satisfied the requirement. 

We are awaiting further clarification on these points from DIBP and will provide further updates once available.

Calculating 'Payroll'

As a general rule, payroll includes:

  • wages and salaries as per state payroll legislation, and
  • payments made to contractors or subcontractors if the work completed is related to services or products provided by sponsor

If the business does not have ‘a payroll’ they are expected to count Directors' salaries, fees and drawings, or the profit of the business.

Timing of Training Activities

Payroll and training expenditure must be for the same period.

From July 2017, it has been clarified that this expenditure may be for the 12 months prior to lodgement of an application, or for the previous full financial year - this should help employers to gather relevant information and documentation.

Start-up businesses operating for less than 12 months will be required to show they have an auditable plan to meet these benchmarks.

We will provide ongoing updates as information becomes available, including the training requirements from March 2018 when the new ‘Temporary Skills Shortage’ (TSS) visa commences (replacing the current 457 visa).
Whether you are an individual visa holder considering how these changes affect you personally or an employer wondering how these and the further proposed changes affect your ability to recruit globally please feel free to contact us at Nevett Ford to see how we are able to assist.