Immigration 2018 Year in Review for Employers

2018 was one of the most significant years in recent memory with a number of seismic changes to visas, immigration and compliance for employers. With the new year upon us, it’s a good time to look back at the main changes.

We have compiled a list of the top 7 immigration and compliance changes for employers below:

1. Abolition of 457 Visas

The 457 visa was abolished in March 2018, and replaced with the Temporary Skills Shortage or TSS Visa.

The TSS visa is in general more difficult to obtain and more restrictive than the 457 program, and in particular:

  • Higher standards of Labour Market Testing apply
  • A minimum of 2 years of work experience is required
  • Where the occupation is on the STSOL, only one onshore extension is possible
  • Application fees are higher

Looking at the application rate for 457 and TSS visas, there has been a significant drop-off in the 457/TSS application rate.

For the first time, there were more bridging visa holders than temporary employer sponsored visa holders in Australia. We expect employers to rely less and less on employer sponsorship going forward, instead relying on other temporary visa types such as bridging visa, working holiday visas and student visa holders.

2. Work Rights for Working Holiday Visas

Changes to the working holiday program were made in November 2018 to support regional employers, including:

  • Work for up to 12 months (rather than 6 months) in animal and plant cultivation
  • Expanded eligibility for a second Work and Holiday visa
  • Possibility of a third working holiday visa for 6 months work in a regional area
  • Increase in the age limit for working holiday makers from Canada and Ireland to 35
  • Increase in application caps for work and holiday subclass 462 applications from certain countries

3. Naming and Shaming of Employers in Breach of Migration Obligations

From August 2018, the Home Affairs Minister can publish information about employer sponsorship who have breached their obligations.

The Minister does not need to comply with any natural justice considerations in publishing such information, and is not liable for any civil damages which result by this disclosure.

This makes the risk of damage to employer reputation and brand more acute – raising the bar for employer compliance when it comes to immigration.

4. Data Matching with ATO

Single Touch Payroll now applies to all employers – regardless of size – from July 2018. This means that the earnings and tax file numbers of all staff is reported to the ATO on each payroll cycle.

Employees must declare a Tax File Number when applying for most employer sponsored visas from August 2018. This makes data matching between the ATO and Department of Home Affairs more straightforward. The ATO has announced that it will use data matching to audit up to 20 million visa holders.

These changes mean that employers who have staff working in breach of visa conditions can accordingly expect a much more prompt follow-up from the Department of Home Affairs.

5. Skilling Australia Fund/Training Obligation for Sponsorship

The Skilling Australia Fund became effective in August 2018. This means that applications for employer sponsored visas – both temporary and permanent – will also require payment of a levy. This can be quite significant, with the rate for permanent visas being up to $5,000 per application.

As a consequence, from August 2018 the training obligation no longer needs to be evidenced when applying for temporary and permanent employer sponsored visas.

Whilst the reduction in paperwork to prove training compliance is significant, the high training levy may reduce the willingness of employers to sponsor staff.

6. Regional Migration

In keeping with an emphasis on regional migration, three new Designated Area Migration Agreements (or DAMAs) were announced in 2018:

The DAMAs allow employers operating in these regions to sponsor workers in a wider range of occupations than is usually possible under the TSS program.

7. Permanent Employer Sponsorship More Difficult

The final tranche of changes to the permanent employer sponsored program came into effect in March 2018. These include:

  • Minimum work experience of 3 years for RSMS and ENS program
  • Minimum salary requirements
  • Exclusion of Perth from RSMS program

Holders of 457 visas as of April 2017 have “grandfathered” status and may be eligible for ENS and RSMS under the previous rules for temporary residence transition stream (TRTS).

The impact of the minimum work experience requirement has been felt particularly sharply in regional areas such as South Australia which relied heavily on international students with minimal work experience to meet program numbers.

Conclusion

Overall, the trend for 2018 has been make it more difficult for employers to sponsor staff for temporary and permanent visas.

Compliance remains a focus, with more effective data matching with the ATO and a new “name and shame” sanction for employers caught doing the wrong thing.

On the other hand, there seems to be a will to support regional employers with changes to working holiday maker work rights and DAMAs making it easier for them to source lower skilled staff than other programs.