The Department of Immigration and Citizenship has announced that there will be changes to the Employer Nomination Scheme Visa program from 01 July 2012. The restructuring involves changes to Employer Nomination Scheme visa subclasses, the introduction of new visa streams and the creation of a consolidated sponsored occupation list.

Are these changes relevant to my business?

If your business intends on nominating employees for permanent residence visas in Australia these changes are relevant to you. The changes that are being made are not significant and are largely being implemented in order to streamline the visa application process.

These changes will not affect the Subclass 457 Temporary Business (Long Stay) Visa program.

We have provided more detailed information below regarding the changes to the Employer Nomination Scheme. Please keep in mind that your Hamilton Watts consultant is also available to provide free advice with regards to the eligibility of your employees for permanent residence and we encourage you to contact us with any questions.

What are the major changes?

Previously both the Subclass 457 and the Employer Nomination Scheme used different lists to specify those occupations which were eligible for sponsorship and nomination. The new sponsored occupation list will consolidate and replace these lists providing clearer permanent residence pathways for 457 visa holders. Effectively this means that if an employee’s occupation has been sponsored for a 457 visa, that occupation will also be eligible for the Employer Nomination Scheme.

As part of the reforms, the Department is also making some changes to the requirements for the Permanent Employer-Sponsored visas.

One of the more important changes is that the upper age limit will be raised from 45 to 50 for applicants applying under both the Employer Nomination Scheme (ENS) and the Regional Sponsored Migration Scheme (RSMS).

If you employ a 457 visa holder and intend to sponsor their application for Permanent Residence under the ENS the changes will impact their application in several ways including:

·         The employee needs to have worked for your company for at least two years

·         A formal skills assessment is not required

·         The employee must be provided with at least the same salary, employment terms and conditions that would be given to an Australian in the same role.

If you intend to sponsor an employee under the ENS who does not hold a 457 visa or has not held a 457 visa for two years additional requirements will need to be met including:

·         The applicant must have competent English (minimum IELTS score of 6 in each test component) unless exempt

·         The applicant must have a positive skills assessment and three years of work experience

·         The employee must be provided with at least the same salary, employment terms and conditions that would be given to an Australian in the same role

The Department of Immigration has not yet provided the legislation relating to these changes. While we are able to advise how these changes are likely to impact on individual employees who are interested in applying for permanent residence, we will not be in a position to provide a complete assessment until the changes are introduced on 01 July 2012.

Feel free to contact us if you would like more information on sponsoring employees for Australian permanent residence.

For more information regarding these changes please also refer to the sources below.

Sources

Department of Immigration and Citizenship:

http://www.immi.gov.au/skilled/skilled-workers/_pdf/perm-sponsored-reforms.pdf

http://www.immi.gov.au/skilled/skilled-workers/_pdf/pes-faq.pdf

http://www.immi.gov.au/skilled/skilled-workers/_pdf/skilled-migration-diagrams.pdf

http://www.immi.gov.au/skilled/skilled-workers/_pdf/skilled-migration-chart.pdf

The Government is seeking to reform the legislation on Living Away From Home Allowances (LAFHA). LAFHA currently provides tax-free benefits for food and housing costs of employees who are required to live away from home on a temporary basis in order to perform their employment duties. Currently 457 visa holders working in Australia may be eligible for LAFHA, however the Government has proposed significant changes to this arrangement as part of the Mid-year Economic and Fiscal Outlook.

Who will still be eligible for LAFHA?

LAFHA will be accessible to individuals who are living away from a maintained Australian home that is for their own use.

How will the new LAFHA reforms affect Subclass 457 Business (Long Stay) visa holders?

LAFHA will no longer be available to 457 visa holders on the basis that they are temporarily living away from a home that they maintain in a foreign country.

Access to the LAFHA tax exemption for 457 visa holders will be limited to those who maintain a residence for their own use in Australia, which they are living away from for work purposes, such as ‘fly-in fly-out’ workers.

It should also be noted that individuals will be required to substantiate their expenditure on accommodation and food beyond a statutory amount. This statutory amount has not yet been set.

When will the LAFHA reforms take effect?

The reforms will take effect from 1 July 2012. The government has advised that this start date will enable them to undertake a consultation process on these reforms, so appropriate transitional arrangements can be put in place.

It is critical that businesses which sponsor employees on Subclass 457 visas are aware of their business sponsorship obligations. Breaches of these obligations can result in fines and sponsorship cancellations. This article will introduce these obligations and the current business monitoring regime.

Employer Obligations

There are a number of obligations that employers must meet to sponsor a visa holder under the 457 visa program. These obligations apply to all new and existing sponsors of Subclass 457 visa holders. These obligations include the following:

• Obligation to ensure equivalent terms and conditions of employment as those provided to Australian employees;
• Obligation to pay travel costs to enable sponsored persons to leave Australia if the costs have been requested in writing;
• Obligation to pay costs incurred by the Commonwealth to locate and remove sponsored employees who become unlawful non-citizens;
• Obligation to keep records such as records of money paid to the sponsored employee;
• Obligation to provide information to Immigration when certain events occur such as a change of the sponsor’s business address, a change in the work duties carried out by the sponsored employee and the cessation of the sponsored employee’s employment;
• Obligation to ensure the primary sponsored person works or participates in the nominated occupation. If the employer wants the sponsored employee to work in a different occupation, the sponsor must lodge a new nomination application;
• Obligation not to recover certain costs from sponsored employees and their family members such as visa application costs;
• Obligation to cooperate with inspectors.

A complete list of the sponsorship obligations can be found at the Department of Immigration and Citizenship’s (DIAC) website at the following link:

http://www.immi.gov.au/skilled/skilled-workers/sbs/obligations-employer.htm

Business Monitoring

Inspectors from DIAC are authorised to undertake a desk audit or conduct a visit (announced or unannounced) in the workplace of Subclass 457 business sponsors. Inspectors have the ability to perform a number of checks, such as examining financial and payroll records and interviewing sponsors, company directors and staff, including sponsored workers.

Often DIAC will commence monitoring on the basis of an allegation received against the sponsor’s business. However it is also common for DIAC to instigate an industry sector-based campaign.

In the event that a sponsor is found to be failing their obligations, DIAC can take the following action:

• Bar the sponsor, for a specified period, from sponsoring more people under the terms of the sponsorship approval;
• Bar the sponsor, for a specified period, from making future applications for approval as a sponsor;
• Cancel one or all of the sponsor’s existing approvals as a sponsor;
• Apply to a Court for a civil penalty order of up to $33 000 for a corporation and $6 600 for an individual for each failure, or;
• Issue an infringement notice of up to $6 600 for a body corporate and $1 320 for an individual for each failure.

In 2010-2011, DIAC sanctioned 137 sponsors, and warned 453 sponsors. The majority of these sanctions were applied as a result of sponsors failing to provide equivalent terms and conditions of employment as they would to an Australian employee. In addition, in the last 18 months DIAC has issued 12 infringements notices.

Hamilton Watts Compliance Services

It is vital that employers sponsoring workers under the Subclass 457 visa program are aware of their obligations, are active in maintaining the necessary records and informed about the conditions and validity of the visas that their employees hold.

Hamilton Watts provides free training to our client companies’ human resources and administrative staff on these obligations and associated record keeping. We also use custom-built IT systems which allow us to assist our client companies in tracking their employees’ visa details to ensure that they are always in compliance with their visa conditions and visa validity periods.

In the event that your business is already employing overseas workers, Hamilton Watts Migration Services will conduct a full, confidential audit in order to assess the status of those currently working on business sponsored visas. We will ensure that your business is fully complying with the sponsorship obligations and Australian migration legislation.

Please contact us if you would like to discuss business compliance issues in more detail.

Department of Immigration and Citizenship sources:

Sponsorship Obligations: http://www.immi.gov.au/skilled/skilled-workers/sbs/obligations-employer.htm

Fact Sheet: http://www.immi.gov.au/skilled/skilled-workers/_pdf/fs-457-sponsor-obligations.pdf

Monitoring 457 Employer Sponsors: http://skilledmigration.govspace.gov.au/2011/07/25/checks-and-balances-%E2%80%93-ensuring-sponsors-meet-their-obligations-to-their-visa-holders-and-deliver-on-their-commitments-to-the-457-program/

The Department of Immigration and Citizenship has announced a raft of changes to enhance the competitiveness of Australia’s declining international education sector. The changes are in response to the report, Strategic Review of the Student Visa Program 2011, by the Hon Michael Knight AO which was released on 22 September 2011.

Among the reforms that the Department is adopting are new streamlined visa processing arrangements for a range of Australian university courses and a fundamental review of the Assessment Level risk framework, which often required prospective applicants to provide substantial sums of financial evidence.

The most significant part of the announcement is the introduction of a University Sector – Post Study Work Visa. This will be a new visa subclass which will allow University Graduates to stay on in Australia and seek work with Australian businesses. The proposed features of this visa are as follows:

•  In order to be eligible the applicant must have completed at least a Bachelor’s degree in the six months before applying for the visa;
• Graduates who have completed a Bachelor Degree or Master’s by coursework in Australia will be eligible for a two year post-study work visa;
• Graduates who have completed a Master’s Degree by research in Australia will be eligible for a three year post-study work visa;
• Graduates who have completed a PhD Degree by research in Australia will be eligible for a four year post-study work visa;
• The English language requirement is competent English, which is a minimum score of 6 in each of the four IELTS components;

The post-study work visa is proposed to be available from 2013.

It is expected that this range of measures will reenergise Australia’s international education sector. In recent times international enrolment numbers have been falling as a result of tougher general skilled migration requirements and increased competition from Canada and the UK. The proposed measures compare favourably with current student visa programs in both of these countries.

In particular, the introduction of a post-study work visa is a welcome announcement and will provide University Graduates with additional options when seeking employment with Australian businesses.

Contact Hamilton Watts if you have any questions regarding these changes.

WITH more than two decades of experience servicing the Sydney and Melbourne markets, Hamilton Watts Migration Services is bringing its expertise to Canberra and Perth.

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The Minister for Immigration and Citizenship, Chris Bowen MP, has announced new measures to assist Perth businesses attract the workers they need and alleviate skills shortages in the resources sector. Recent mining investment in Perth is expected to lead to a shortage of 36 000 tradespeople by 2015.

To encourage new skilled migrants to settle in Perth, the city will now be reclassified as a regional city for migration purposes, and will be able to benefit from inclusion in the Regional Sponsored Migration Scheme. The Regional Sponsored Migration Schemeallows employers in regional or low population growth areas of Australia, to sponsor employees who are foreign nationals for a permanent residence visa to live and work in Australia.

The Department of Immigration and Citizenship (DIAC) has introduced an increase to salary thresholds that apply to the 457 visa program.

The temporary skilled migration income threshold (TSMIT) will be indexed by 3.9 per cent for all new nominations, in line with the Australian Bureau of Statistics (ABS) report on average weekly earnings.

The TSMIT will rise from $47,480 to $49,330. This increase has been in effect from 01 July 2011.

All new Subclass 457visa applicants will therefore need to be earning a base salary of at least $49,330. Please note that superannuation, LAFHA, bonuses and commissions cannot be included as part of the base salary figure.

This change leaves existing subclass 457 visa holders unaffected unless they change employer and require a new nomination.

The Federal Government has announced a range of immigration initiatives in the new Budget. The key themes were building Australia’s workforce to support Australia’s growing economy and addressing labour needs in regional areas.

It was also announced that application fees charged by the Department of Immigration are expected to increase by 15 percent from 01 July 2011 for a variety of visa subclasses. These increases will apply to employer sponsored temporary and permanent visas. No official announcement has yet been made on the exact figures of the new application fees.

There were three significant initiatives which were introduced as part of the budget that are of note for employers. These initiatives are as follows:

• Additional funding and reduced processing times for Subclass 457 visas;
• Introduction of Regional Migration Agreements (RMAs)
• Introduction of Enterprise Migration Agreements (EMAs)

Each of these initiatives is discussed in more detail below.

Additional Funding for 457 Visa Processing

The budget provides additional funding of $10 million for the Subclass 457 visa program. This funding aims to halve the processing times for 457 visas from the current median of 22 calendar days.

Regional Migration Agreements

Regional Migration Agreements (RMAs) are a new migration initiative that will help high growth regional areas address labour needs through geographically based migration arrangements that set out the occupations and numbers of overseas workers needed in the area. Concessional access may be granted to semi-skilled occupations, which are not currently on the 457 Skilled Occupation List, where there is a demonstrable need. These agreements will allow employers to gain streamlined access to temporary and permanent overseas workers where local labour cannot be sourced.

This initiative is still in the consultation stages and the eligibility requirements have not been finally determined. It is expected that this initiative will be of substantial benefit to employers in the mining, engineering and construction industries who require access to semi-skilled workers such as riggers and scaffolders, which are currently in short supply and ineligible for sponsorship under standard 457 visa arrangements.

Enterprise Migration Agreements

Similar to RMAs, Enterprise Migration Agreements (EMAs) provide possible concessional access for employers who have a genuine need to fill semi-skilled positions which are currently ineligible for standard 457 visas. However, while RMA’s are directed at regional areas, the EMAs are intended for large resource projects with capital expenditure of more than 2 billion dollars and a peak workforce of more than 1,500.

EMA’s will be negotiated between the project owner and the Department of Immigration. They will allow for contractors working on the project to sign onto the EMA without having to negotiate their own labour agreements.

Some additional advantages of utilising an EMA include possible concessions with regards to the salary, qualifications and English language requirements.

Closing Comments:

The initiatives outlined here represent an increased level of commitment from the Department of Immigration and Citizenship to facilitate the entry of skilled and semi-skilled workers where employers face genuine needs. In particular, the Regional Migration Agreements and Enterprise Migration Agreements demonstrate the Department’s acknowledgement of the difficulty of staffing large construction and mining projects under the existing legislation.

The proposed reduction in processing times for the 457 visa program is also a welcome initiative, which will help employers fill urgent skill vacancies. Currently 457 visa processing times across different DIAC Business Centres are uneven and it is hoped that this initiative will establish a common benchmark.

Senior Hamilton Watts Consultants are available to discuss these changes and to provide advice and direction to our corporate clients without charge. Hamilton Watts has substantial experience with Labour Agreements and has commenced work on an Enterprise Migration Agreement. Please do not hesitate to contact your Client Manager for an explanation of any of the initiatives listed above.  

The sources for the information presented in this newsletter are the Department of Immigration and Citizenship and the Minister for Immigration and Citizenship, the Hon. Chris Bowen MP.

On 02 April 2011 the Department is introducing PIC 4020. This PIC, which is also known as the ‘Fraud PIC’ is aimed at reducing the level of fraud present in visa applications by providing additional penalties to those who submit false or misleading information in a visa application.

Where an applicant is found to have provided false or misleading information, the application will be refused and the applicant will be subject to a three year bar which may prevent the grant of a further visa.

The three year bar applies only to visas that are subject to assessment against the Fraud PIC.

The affected visa subclasses are currently limited to General Skilled Migration subclasses and Employer Subclasses.

GMS Subclasses: 175, 176, 475, 476, 485, 487, 495, 496, 880, 881, 882, 883, 885, 886, 887

Employer sponsored Subclasses: 119, 121, 457, 856, 857

PIC 4020 will apply to applications for the above listed subclasses, which are lodged on or after 02 April. Applications for these subclasses which have already been lodged but not decided by 02 April will also be considered against this PIC.

The Department of Immigration and Citizenship updates and changes the forms they produce on a regular basis. These changes are categorised by the Department as either ‘essential changes’ or ‘non-essential changes’. When a form change is essential clients are strongly encouraged to use the updated version of the form in future applications.