Abolition of 457 Visas: The Impact on Employing Strategies

On April 18th 2017, the Turnbull-led government has abolished the Howard government-introduced 457 visa from the 1996-97 era. The government has announced that it will be introducing two new visas as the replacement for 457. But how will this impact the employing strategies of Australian businesses?

What will change

Firstly, the number of occupations on job lists was already reduced from 651 to 435, while restricting access to 59 other professions.
Starting 1 July 2017, occupation lists will be subjected to additional review. The English language salary exemption threshold will be completely removed and the applicants will need to provide criminal clearance certificates and be no more than 45 years of age at the time of application.
From 31 December 2017, the Department of Immigration and Border Protection will start collecting Tax File Numbers for 457 visa holders and match the data with the Australian Tax Office’s records in order to make sure that visa holders aren’t paid less than their nominated salary.
Finally, starting March 2018, Two streams of visa will be introduced: the Short-Term, of up to two years and the Medium-Term, of up to four years.

Here’s a list, outlining all new requirements, included in both streams:

  • A minimum of two years of work experience in the applicant’s skilled occupation
  • Mandatory labor market testing, unless an international obligation applies
  • Minimum income threshold
  • Market salary rates
  • An obligatory penal clearance certificates
  • Better knowledge of the English language
  • Non-discriminatory workforce test
  • Employer contribution towards training Australian workers

The current 457 holders are in the clear

All the mentioned changes are, fortunately for businesses, grandfathered, which is to say that the companies that are currently using workers on 457 visas can continue with their current arrangements. This is very important, seeing as how businesses won’t have to start changing their entire foreign employment strategies instantaneously.
Regardless, it is advised that employers review their current arrangements, so as to be able to strategically plan their workforce for the future, seeing as how quite a number of changes will have to be addressed. Hiring an expert immigration lawyer in Sydney and throughout Australia is very much recommended, seeing as how these recent changes are going to take some time getting used to.

The impact

The 457 scrapping was a huge step made by the Australian government and, as such, it has been subjected to mixed reactions. While many groups have supported the principle of prioritizing Australian jobs, others are predicting that this move might cause a shortfall in required skills in some economic areas.
Some are even predicting that the actual impact of the 457 abolishment will be limited at best and maybe even insignificant, claiming that the changes are more about the political message, as the first step towards immigration crackdown.
Some sectors, such as higher education and technology will potentially suffer, as there simply aren’t enough Australians with the appropriate skills in the mentioned fields.
Employers will start experiencing many new difficulties, such as greater costs and time for business when recruiting international workers; the mandatory labor market and non-discriminatory workforce testing will doubtlessly contribute to this.
Additionally, with stricter English language and work experience requirements, the HR departments will likely have a harder time hiring temporary visa workers.

Employing strategies will have to go through changes, now that the 457 visa has been abolished. Consulting experts is advised and, in order to remain afloat, developing brand new strategies will be unavoidable. No matter whether the real goal of the 457 scrapping was immigration crackdown, or “Aussying” the Australian workforce, one thing is certain: the business landscape has completely changed and the employing strategies will have to follow in suit!

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