Opposition Leader Announces Overhaul of Temporary Sponsored Work Visa Program if Labor Party Wins

At a Glance

The Opposition Leader in Australia has announced that should the Labor Party win the federal election on May 18, 2019, the new government would overhaul Australia’s temporary sponsored work visa program, and would implement measures to significantly increase minimum salary requirements and levies for the Skilling Australians Fund. This alert analyses the proposed measures.

The situation

Ahead of the Australian federal election on May 18, 2019, the Opposition Leader announced that a Labor Government would overhaul Australia’s temporary sponsored work visa program. The Coalition Government responded that this would severely impact the Australian economy.

Labor Party's plan

Key features of Labor’s plan to revamp the Temporary Skill Shortage (TSS-Subclass 482) visa program would include:

• Increased minimum salary threshold. The minimum salary required to be eligible to sponsor a foreign national under a TSS visa would be raised from AUD 53,900 to AUD 65,000, indexed annually.
  
  • Background. This increase was recommended by the Australian Senate Legal and Constitutional Affairs References Committee following its inquiry into the temporary skilled visa system and related issues. The Committee is one of several that are designated by the Australian Senate to hear evidence on specified matters.
• Increased Skilling Australians Fund (SAF) levy. The proposed increases include the following:
  
  • For business with gross revenue under AUD 10 million per year. Three percent of the required minimum salary amount (per year and for each sponsored worker), which would currently be AUD 1,950.
  • For business with gross revenue over AUD 10 million per year. Six percent of required minimum salary amount (per year and for each sponsored worker), which would currently be AUD 3,900.
• Restrictions on salary calculations. The Labor Party has proposed implementing stricter policy controls on the benefits and allowances that can be considered salary to ensure that wages are above the required minimum salary amount and for consistency with industry standards.
• Maintain salary rate framework. The framework that ensures TSS holders’ salaries are comparable to local workers would remain a core component of the skilled visa system. The Labor Party has also stated that in determining market salary rates, they would take recommendations from a newly-established tripartite body with equal representation from the government, unions and employers.
• Establish Australian Skills Authority. A new independent authority, called the Australian Skills Authority (ASA), would be created to review skilled occupation lists and restrict temporary work visas to jobs where there is a genuine shortage. The ASA would have equal representation from government, unions and employers and have a dedicated independent labour market analysis resource.
  
  • Current policy. The Department of Jobs and Small Business is a government department responsible for analyzing labour market data and recommending amendments to skilled migration occupation lists to ensure that they meet Australia’s labour market needs.

• Introduce an Australian Jobs Test. Labour agreements, which allow employment of foreign workers that would not meet TSS standards (for example, for occupations falling outside the approved occupation lists for TSS visas) would only be available if they support or create jobs for Australian workers.
  
  • Current policy. Labour agreements can only be entered into when there is a demonstrated need that cannot be met by the Australian labour market.

• Introduce measures to target labour exploitation. Some proposed measures include:
  
  • Increased funding for a joint agency taskforce and increasing cooperating between the Fair Work Ombudsman and the Department of Home Affairs;
  • Creation of a public register that outlines the number of visa holders engaged by individual workplaces and employers;
  • Requirement for employers to provide their workers with relevant information on market salary rates (e.g. collective agreements, awards) and contact details of available support services; and
  • Extension of regulatory powers of the Fair Work Ombudsman to investigate breaches of the Migration Act relating to visa work conditions and for unions to commence civil actions for such breaches.

Coalition Government response

The Coalition Government’s response was that the proposals would hinder business and the economy. It additionally pointed out that the government has already introduced measures to protect Australian workers through the implementation of labour market testing and the Skilling Australia Fund Levy.

Background

The Labor Party’s announcement was delivered during the election campaign, where the stagnation of Australian wages has become a central issue. The announcement is framed around electorate concerns that the skilled work visa program is contributing to wage stagnation and that a skills shortage should last no longer than it takes an Australian to do that job.

Impact for employers

Fragomen’s analysis is that further restrictions on the temporary work visa program could limit the growth of businesses that are currently facing genuine skills shortages, and would have negative consequences for the Australian economy and the ability of Australia to remain competitive in attracting global talent.

Looking ahead

Fragomen will continue to engage with the Australian government on immigration policy and its regulatory framework. Should the Labor Party win the election on May 18, 2019, Fragomen will seek to engage with the new government, the tripartite advisory body and the Australian Skills Authority to ensure that our clients are represented as to these policies and to gain a seat at the table to represent our clients’ interests.

MARN: 1798314

This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to fragomenclientcorrespondence@fragomen.com.