From 12 August 2018, employers nominating overseas workers on both temporary and permanent visas are required to pay the Skilling Australians Fund levy.
Implementation was anticipated since May when the Migration Amendment (Skilling Australians Fund) Bill 2018 and associated Migration (Skilling Australians Fund) Charges Bill 2018 passed the Senate on 8 May 2018 and subsequently received the Royal Assent on 22 May 2018.
The fund is managed by the Department of Education and Training and its aim is to grow the number of apprentices and trainees to support Australia’s future productivity, jobs and growth.
The purpose of the SAF levy is to require employers who sponsor temporary and permanent overseas skilled workers to contribute to the broader skills development of Australians.
Who is affected?
All employers nominating overseas workers for the 482 – Temporary Skilled Shortage visa, 186 – Employer nomination scheme visa or 187 – Regional Sponsored Migration Scheme visa.
The SAF levy amount is payable in full when lodging a nomination application. The amount depends on the size of the sponsoring business and the proposed period of stay of the overseas worker in Australia. SAF levy payments are tax deductible.
How much is the required contribution?
For the permanent visa subclasses – 186 and 187 – the levy is a one-off payment and its amount depends on the size of the business. Employers with the annual turnover under 10 million are required to pay AUD 3, 000 and those with higher turnover are subject to levy payment of AUD 5, 000.
The contribution for the TSS visa subclass 482 is calculated per number of years of proposed nomination. Small businesses are required to pay AUD 1, 200 per year and large ones AUD 1, 800.
The levy is also payable where a nomination application is being lodged to allow a TSS visa holder to change employer or occupation.
And what about the training obligations?
The training benchmarks will no longer apply from 12 August 2018.
For pending applications lodged prior to this date, the previous training benchmark requirements will continue to apply.
To maintain compliance with the TSS/Standard Business Sponsorship (SBS) training obligations the previous training benchmark requirement continues to apply in each 12 month period, from the date of SBS approval through to 12 August 2018.
Labor Market Testing update
The Skilling Australians Fund Bill also sets out the new requirements for Labor Market Testing (LMT), which were introduced as a mandatory criterion to be met at the nomination stage of the new Temporary Skills Shortage (subclass 482) visa on 18th March 2018. With effect from 13 August 2018, the LMT must be conducted no more than 4 months prior to lodgment of a nomination application. Advertisements used to evidence LMT must run for at least 4 weeks using at least two national online or print methods or radio. Adverts must also include:
the nominated salary, if the proposed salary is $96,400, and
skills and work experience requirements.
Although the timing and duration required for LMT have tightened, there is alternative evidence that can be provided in some special cases such as for nominations of intra-company transferees or those earning over AUD 250,000.
In addition, the list of accepted mediums for LMT evidence has expanded to include LinkedIn’s online recruitment platform and industry specific websites for the nominated occupation.
What is the impact of the changes?
It appears that businesses already investing in training and directly supporting apprentices or trainees will need to double up in their contributions – by incurring the training costs as well as the levy to the government if they wish to sponsor employees on the TSS visa. For certain businesses, this could represent additional costs. Employers will need to factor that when considering their future resourcing options. Also, while in past, employers may have applied for the maximum period of the visa, they may now consider applying for a shorter term noting the SAF levy is imposed on a per year basis of the visa. On the other hand, the companies with large payroll and/or a low current training spend may be advantaged.
It is also important to note, that as a result of large number of changes introduced to the employer sponsored visas since April 2017, if the relevant nomination and/or visa requirements are not met at the time of application, the applications may be refused without employers or visa applicants given the opportunity to rectify the mistake or provide further information. Negative outcomes may also impact further applications. Therefore it is even more crucial now that employers and visa applicants seek professional immigration advice from Registered Migration Agent for guidance about the requirements and assistance with the process.
If you would like to know more about how these changes impact you please book a consultation with our migration agent.