Issue Number 28
August 2016

Australian immigration update

Does your business employ foreign skilled workers on Subclass 457 visas and is the demand for this visa category declining?

The Subclass 457 (SC 457) visa allows skilled workers to come to Australia to work for an approved sponsor for up to four years.

The statistics published by the Department of Immigration and Border Protection (DIBP) at 31 March 2016 show that the number of primary SC 457 visa holders has dropped in comparison to the same period in the prior year, but perhaps surprisingly in the context of recent economic conditions, the demand for this visa category from businesses has not declined to the same degree.

SC 457 Visa Program Statistics

The detailed statistics reports also show significant shifts for this visa category away from the mining, utilities and transport industries towards accommodation and food services, financial and insurance services as well as professional, scientific and technical industries.  This reflects what we have all been seeing occur in the broader Australian economy.

If business demand for the SC 457 visa is steady, then why is the number of visa grants reducing?

There are likely to be a number of issues contributing to this.

Genuineness criterion

The immigration legislation was amended in July 2013 to introduce a requirement that the Minister to be satisfied that the position associated with the nominated occupation to be genuine.  Although its introduction had little impact until late 2015, these rules have contributed to an increase in requests for further information, visa refusals and visa processing times.

The guidelines used by case officers require them to consider whether:

  • the nominated position may have been created to secure a migration outcome for the nominee and/or any of their family members;
  • the tasks of the position are substantially aligned with the tasks of the nominated position; or
  • the position does not appear consistent with the nature of the business.

While many of these considerations may be largely irrelevant for many SC 457 visa nominations, the need for case officers to perform this deeper analysis and gain a deeper understanding appears to be inadvertently placing pressure on visa processing times.

Visa processing times

In the past processing times for SC 457 visa applications have been 5-6 weeks from the date of application.  However, the current experience for decisions on these visa applications has drifted out to 2-3 months.

Accordingly, while much the same number of SC 457 visa applications are being lodged by businesses, an increased incidence of additional information requests and longer processing times by DIBP is resulting in fewer visa grant decisions being made in the same period of time.  Further, a greater number of visa refusals will also be having some impact.  It is also possible that the new genuineness requirements have resulted in some visa applications that have been lodged being withdrawn before decisions are made.

 SC 457 Sponsorship Accreditation – is there an opportunity?

1 July 2016 saw the introduction of some changes with respect to the SC 457 Accredited Sponsorship criteria, which will make gaining accredited status more accessible to some sponsors of SC 457 visa holders.

Why is this important?

If a sponsor meets the criteria for accreditation, then it can secure an approved sponsorship for a period of 6 years, but it will also gain access to priority processing times for certain applications. 

The compressed visa processing time is especially important for businesses needing SC 457 visa holders to meet short term resourcing requirements.

What are the current criteria for gaining Accredited Status?

Business Sponsors seeking Accredited Status must have each of the following characteristics (in addition to the standard business sponsorship requirements):

  1. be a government agency, a publicly-listed company or a private company with at least $4 million annual turnover for the last 3 years;
  2. have been an active 457 sponsor for at least 3 years (with no more than a 6 month break in the past 36 months), with no adverse information (based on monitoring, including formal warnings and sanctions);
  3. have sponsored at least ten primary 457 visa holders in the 24 months prior to the application for accreditation (the previous requirement was 30 visa holders over a 12 month period);
  4. have lodged an agreed level of decision-ready applications over the previous two years;
  5. have a non-approval rate of less than 3% for the previous three years;
  6. have Australian workers comprising at least 75% of their workforce in Australia;
  7. engage all 457 holders as employees under a written contract of employment that includes at least the minimum employment entitlements as required under the National Employment Standards (unless their occupation is exempt from this requirement);
  8. have all Australian employees paid in accordance with an Enterprise Agreement or an internal salary table that reflects the current market salary rates for all occupations in their business;
  9. have provided details of all business activities undertaken by their business; and
  10. have provided details of all Principals/Directors of their business to the department.

What action should I take?

The introduction of the genuineness criterion increases the importance of making sure your SC 457 visa applications are carefully and thoroughly prepared together with all of the necessary supporting documentation.  It may be appropriate to review current procedures for your business.

If your business is currently a sponsor of SC 457 visa holders and you meet the above criteria, then you should contact your registered migration agent to discuss making an application for accredited sponsorship status.  This could compress your timing for obtaining SC 457 visas and enable your business to respond opportunities on a more timely basis.

Our contact details

James Hyett is a Partner of McLean Delmo Bentleys, and is a registered migration agent (MARN: 0957324).

Please contact James on (03) 9018 4679 or email James should you wish to discuss immigration issues facing your business.

Important: This is not advice. Clients should not act solely on the basis of the material contained in this newsletter. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly.

We therefore recommend that our formal advice be sought before acting in any of the areas. This document is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval.

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