Industry Insights: Recruitment Consultants – Replacement of the Subclass 457 Visa with the TSS Visa

What does the abolishment of the 457 visa mean for visa-holding Recruitment Consultants in Australia?

Much has been speculated since the announcement on the 18 April 2017 that the Temporary Work (Skilled) Subclass 457 visa will be abolished and replaced by the Temporary Skill Shortage (TSS) visa in March 2018.

The main changes that have or will affect Recruitment Consultants in Australia is the positioning of the occupation on the Short Term Skilled Occupation List (STSOL) and the Labour Market Testing that will be mandatory for employers sponsoring overseas workers post March 2018.

Labour

What will the characteristics of the TSS Visa be in comparison to the current 457 visa?

The fine details of the TSS visa have yet to be released but at this stage we do know:

• Recruitment Consultants will only be eligible to apply for a two-year TSS visa with the ability to renew the visa once onshore for a further two years
• Recruitment Consultants will need to demonstrate at least two years of full time experience
• Recruitment firms will need to demonstrate they have actively and genuinely tested the local labour market by showing attempts to hire Australian residents before accessing international worker’s. This is known as Labour Market Testing.
• Recruitment firms with a turnover of less that A$10Million will be required to pay a levy of $1,200.00 per year the recruiter is sponsored for their company. Recruitment firms with a turnover of more than A$10Million per year will be required to pay $1,800 per year the worker is nominated. For example, a nomination of a Recruiter from a firm that has turnover of less than A$10Million sponsored for two years will cost the employer a further $2,400.00 which will be used by the Australian government to contribute towards the Skilling Australians Fund
• Recruitment firms that are Standard Business Sponsor will no longer need to meet the training benchmarks (1% of payroll towards training Australian employees, or 2% of payroll towards an industry training fund) as the Skilling Australians Fund (SAF) will replace this
• The Department of Immigration and Border Protection will collect Tax File Numbers to data-match with the Australian Taxation Office to ensure employers and visa holders are being compliant with their financial and remuneration obligations
• All applicants will be required to provide a police clearance from every country they have lived in for more than 12 months in the last 10 years.

Caveats on the occupation ‘Recruitment Consultant’ – (ANZSCO 223112)

With the replacement of the relevant occupation lists available for sponsorship, caveats were also applied to several occupations.

The Caveats that apply to ‘Recruitment Consultant’ are:

• The sponsoring business must provide the sponsored worker with a nominated base salary of at least A$65,000 per annum
• The sponsoring business must have an annual turnover of at least A$1Million
• The sponsoring business must have at least 5 or more employees

Permanent Residency options

As the occupation ‘Recruitment Consultant’ is on the ‘Short Term Skilled Occupation List (STSOL), Recruitment Consultants can only be sponsored for a two-year visa, with the possibility of a further two-year visa renewal onshore.

Unlike the previous pathways with the Subclass 457 visa, occupations on the Short Term Skilled Occupation List (STSOL) do not enable transition into Permanent Residency via employer sponsorship after two years of holding the visa .

Current arrangements and impact to current 457 visa holders

Currently, the 457 visa programme is still to be utilised until it is officially replaced by the TSS visa in March 2018.

We do not have any further information regarding the impact these changes will have to current 457 visa holders such as;

• Whether the Employer Nominated Scheme Temporary Residence Transition Stream (Subclass 186) will be available for 457 holders who have completed two years with their sponsor to transition into Permanent Residency
• Whether 457 visa applications that have yet to be decided, post March 2018 will be subject to grandfathering arrangements
• If businesses who are already approved as Standard Business Sponsor’s will still be able to use that approved sponsorship to sponsor workers under the TSS Visa

Wrapping it up

Appropriately qualified and experienced recruitment professionals are in a shortage in Australia with the recruitment industry for several years now relying on international workers to supplement their Australian workforce. Although the changes that will be implemented are significant, pathways for international recruitment professionals to work in Australia should continue well into the future.

The Short Term Skilled Occupation List (STSOL) will be reviewed bi-annually, with the Medium-Long Term Strategic Skills List being reviewed annually.

It is highly recommended that businesses that anticipate they will be negatively affected by these changes reach out to Government through their industry bodies to emphasise the need for overseas skilled workers in the recruitment industry.