5 Reasons the TSS Visa will be Less Attractive to Employers than the 457 Visa

457 changing to TSS

457 visas are due to be abolished in March 2018 and replaced by the Temporary Skills Shortage (TSS) or Subclass 482 visa.

The TSS visa will operate in a similar way to the current 457 visa, but will be more difficult and expensive to obtain.

This article goes through the 5 main differences between the 457 visa and the new TSS visa.

1. Short-Term and Long-Term Streams

Unlike the 457 visa, the TSS visa will have two disinct streams which have different fees, occupations lists and requirements.

The Short-Term Stream will be valid for up to 2 years, and applicants must nominate an occupation on the Short Term Skilled Occupations List (STSOL). The intention of this stream is to allow workers a short-term visa only, with restricted ability to extend onshore.

The Long-Term Stream will be valid for up to 4 years, and the occupation must be on the shorter Medium/Long Term Strategic Skills List (MLTSSL). This stream is for more highly sought-after specialisations, and holders can extend onshore and will potentially be able to access permanent employer sponsored options.

2. Restrictions on Visa Extensions

Applicants in the Short-Term Stream will need to meet a “Genuine Temporary Entrant” (GTE) requirement. This would require applicants to show that they intend only a short-term stay in Australia, and that they will return on completion of their TSS visa in most cases.

If the TSS applicant has already been in Australia for some time (say 4 years), they may find it very difficult to meet the GTE requirement.

In addition, Short-Term Stream TSS holders will have restrictions in applying for extensions to their visas. They can only extend their TSS visa whilst in Australia once, giving a stay of up to 4 years maximum.

Whilst it is theoretically possible to lodge an application for extension whilst outside Australia, it is likely that this would raise concerns with the Genuine Temporary Entrant requirement.

The 457 visa does not have a “Genuine Temporary Entrant” requirement, and there are no restrictions on extensions onshore.

3. Increased Cost of TSS Visas

The TSS visa will be much more expensive to apply for than a 457 visa.

The primary application fee for the TSS visa is likely to be $1,150 for a Short Term Stream (2-year) TSS or $2,400 for a Long Term Stream (4-year) TSS. The corresponding fee for a 457 visa is $1,080 and this can lead to a visa valid for up to 4 years.

In other words, the lodgement fee for a 4-year TSS visa will be about twice as much as for a 457 visa.

The main increase in costs will be the requirement to pay a training levy when lodging a nomination for a TSS visa. The amount is $1,800 per year for large businesses with turnover of $10 million or more, or $1,200 for smaller businesses. For a 4-year TSS visa, this would mean an increase of up to $7,200 over the cost of applying for a 457 visa.

Immigration has confirmed that the cost of the training levy cannot be passed onto the visa applicant.

If the nomination is refused or withdrawn, then the levy is refundable. However, if the employee ceases employment after grant of the TSS visa, a refund is not payable.

4. Labour Market Testing

Labour Market Testing (LMT) requires employers to advertise the sponsored position and show that they have not been able to source a suitable Australian employee.

Labour Market Testing is only required for certain occupations when applying for a 457 visa – for example nurses, engineers and trades.

For the TSS visa, Labour Market Testing will be required in all cases, unless there is an exemption due to one of Australia’s International Trade Obligations.

Currently it is possible to rely on free online advertisements for positions (eg through Gumtree). This will not be the case for the TSS visa, and it is likely that other restrictions will apply.

We are waiting on exact details, but it is possible that there will be additional delay and expense to employers seeking to sponsor for the TSS visa due to this requirement.

5. Mandatory Work Experience Requirement

All TSS applicants will need to show that they have worked for at least 2 years in their nominated occupation to be eligible for grant of a TSS visa.

Currently, work experience is not required for a 457 visa, providing the applicant has a relevant qualification and any necessary registration or licensing.

This change will impact most on employers sponsoring international students who have completed studies in Australia.

Conclusion – Employers May Rely on Temporary Visas other than the TSS Visa

The TSS visa will be a less attractive option than the current 457 visa.

As a result, many employers may have an increased reliance on employees on other temporary work visas – for example working holiday, student and occupational trainee visas.

These visas have more restrictions to work rights, tend to be shorter in duration and more likely to be cancelled.

This makes tracking work rights more complex for employers. The Employer Sanctions Legislation makes the risk of getting this wrong very high for employers.

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