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The introduction of the Temporary Skills Shortage (TSS) visa is the most significant overhaul of Australia’s principal work visa program for two decades. According to the Australian Government the new visa is designed to facilitate engagement of overseas workers to address temporary skill shortages while ensuring that Australians are given the first opportunity for employment.  It enables employers to address labour shortages with genuinely skilled workers from overseas where they cannot source an appropriately skilled Australian citizen or permanent resident.


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Introducing the TSS


The new TSS regime reflects a general tightening of the visa criteria, adding layers of complexity for some applications, and streamlining others.  There are a number of key themes identifiable in the structure of the TSS visa program. These include:


Greater discretionary powers: The TSS provisions allow the Department to look behind the employment arrangements for TSS visa holders, and to refuse applications where there are concerns such as that



Focus on integrity and genuineness: Some measures here include:


  • Broadened definition of adverse information which is assessed at the TSS sponsorship, nomination and visa stage and also for ENS/RSMS applications

  • Focus on non-discriminatory recruitment practices, to ensure they are open, competitive and merit-based

  • More prescriptive labour market testing requirements, with exemptions now being limited only to those under international trade agreements

  • Continued focus on the genuineness of positions to prevent the use of the TSS program to create positions to procure a visa outcome for the applicant


Increased importance of compliance: Streamlined processing initiatives such as the auto-approval of some sponsorship renewals and TSS nominations are certainly welcomed by Accredited Sponsors. At the same time as facilitating low-risk applications from trusted sponsors, the Department is introducing several measures to enhance the integrity of the temporary work visa program.




For Approved Sponsors


Businesses approved as a sponsor before 18 March 2018 are eligible to lodge nomination applications for TSS visas. There are a number of amendments to sponsorship obligations and accredited sponsor criteria that affect existing sponsors from 18 March 2018.




Sponsorship Obligations


Changes to sponsorship obligations affect all businesses with current approval as a sponsor as at 18 March 2018 as well as any businesses approved as a sponsor after that date.


Failure to commence: A new obligation has been introduced requiring sponsors to notify the Department within 28 days of the employment start date agreed between sponsor and visa holder, if the visa holder fails to commence employment.


Other changes include:


  • Amendments to the obligation to ensure equivalent terms and conditions of employment, to reflect the changes to salary requirements discussed below.

  • Strengthening of the obligation to ensure the primary sponsored person works only in their nominated occupation, to reflect the new visa Condition 8607 discussed below.

  • Broadening of the obligation not to pass on the costs associated with a nomination application, to prevent sponsors from passing on the Skilling Australians Fund levy costs on to visa holders/ applicants.




Accredited Sponsorship


The accredited sponsorship program provides a number of benefits including priority processing, auto-approval of certain applications and facilitated assessment of criteria such as labour market testing. Sponsors who are not accredited are at risk of ongoing processing delays and closer scrutiny of their applications.


Commonwealth Government agencies and Trusted Traders qualify for accreditation. The scheme is also available to other businesses who have a sound history of use of visa programs, a high proportion of Australians among their workforce, and sound employment law practices.


The significant benefits of accreditation mean that accredited sponsors should have systems and processes in place to maintain compliant and protect their status. Sponsors who are not yet accredited should work towards eligibility in order to access the facilitated processing arrangements.




For New Sponsors


Changes to the sponsorship approval criteria will affect all new sponsors and any sponsors seeking ‘renewal’ of their approval as a sponsor after 18 March 2018.


All sponsorship applications lodged after that date will be approved for a period of five years.


A dedicated sponsorship stream for Overseas Business Sponsors has been reinstated, allowing approval of businesses based overseas as a sponsor of TSS visas in order to assign a person to Australia to fulfil a contractual obligation or establish a new business presence in Australia.





Nomination Criteria


Before a person can apply for a TSS visa, an approved sponsor must have lodged a nomination application which presents the nature of the position, the reason for employing a TSS visa holder/ applicant in the role, and the terms and conditions of employment. The visa can only be approved if the nomination application is approved.




Eligible Occupations and Visa Periods


Occupations eligible for the TSS visa are divided into three lists. For a nomination application to proceed, the nominated occupation must be eligible at the time the nomination application is lodged.


The Short Term Skilled Occupation List (STSOL) comprises occupations which are in current short term shortage. Unless an international trade agreement provides otherwise, visas granted for such occupations are valid for a maximum period of two years, with the possibility of onshore renewal for a further two years. A third application for an STSOL occupation may only be lodged from outside Australia and will be subject to strict genuine temporary entry requirements. These period of stay restrictions do not apply to some intra-corporate transfers under Australia’s international trade obligations.


Occupations on the STSOL are not eligible for the Employer Nomination Scheme, unless the visa holder is eligible for transitional arrangements.


The Medium and Long Term Strategic Skills List (MLTSSL) comprises occupations in high demand, with a high value to Australia's economic development, and with a relatively long lead time for development of occupational skills within Australia. Occupations on the MLTSSL are eligible for a four-year TSS visa, with the possibility of indefinite renewals, and access to a transition pathway to permanent residency through the Employer Nomination Scheme.


The Regional Occupation List (ROL) restricts certain occupations to regional areas of Australia only. The regions are defined by postcode but generally include anywhere outside the metropolitan areas of Sydney, Wollongong, Newcastle, Melbourne, Brisbane, the Gold Coast and Perth.




Caveats on Occupations


Caveats apply to occupations on the STSOL and MLTSSL, restricting their use based on factors including, but not limited to, the following:


  • the nature of the role and/or the business setting for the role;
  • nominated base salary; and
  • size and turnover of the nominating employer.


Position descriptions for roles intended for TSS applicants need to be carefully assessed to ensure they are not the subject of a caveat that would result in refusal of the application.




Salary Requirements


The salary requirements for TSS are different from those that existed in the 457 visa program. One key difference is that non-monetary benefits such as accommodation, clothing, meals and travel are no longer considered when assessing whether the proposed remuneration for the visa holder meets the Temporary Migration Skilled Income Threshold (TSMIT).


Sponsors are required to determine the salary that is, or would be, paid to an Australian performing the same role in the same location (known as the Annual Market Salary Rate (AMSR)). The monetary component of the AMSR (i.e. excluding any non-cash benefits) must begreater than or equal to TSMIT (currently set at $53,900). The proposed guaranteed annual earnings (GAE) of the visa applicant (including non-cash benefits) must be greater than or equal to the AMSR. The cash  components of the visa applicant’s GAE (excluding any non-monetary benefits) must be greater than or equal to TSMIT.




Labour Market Testing and Exemptions


Sponsors are required to test the Australian labour market to demonstrate that no suitably qualified and experienced Australian citizen or permanent resident is readily available to fill the nominated position. A nomination application will be refused if LMT evidence is not submitted at the time of application.


When is a nomination exempt from LMT?


Exemptions from LMT arise from Australia’s commitments under various free trade agreements, as well as the World Trade Organisation General Agreement on Trade in Services. These include exemptions based on the visa applicant’s nationality; the jurisdiction from which the visa applicant is making an intra-corporate transfer; and/or the nature of the visa applicant’s proposed role in Australia.


What evidence is required?


Evidence must include:


  • details of the advertising (paid or unpaid) of the position and any similar positions, commissioned or authorised by the approved sponsor; and
  • details of fees and other expenses paid/payable for that advertising.


LMT must have been conducted within the 4 months prior to lodgement of the nomination application. However, where there have been redundancies or retrenchments in the same or a similar occupation in the business of the sponsor within those 4 months, the LMT must have been conducted since those retrenchments or redundancies.


Notably, employers will be expected to test the local labour market before nominating any incumbent 457/TSS visa holder for a further visa.


The LMT condition will generally be considered satisfied if:


  • the nominated position has been advertised in Australia;
  • the position was advertised in at least two places through the following acceptable channels:
    • national recruitment websites, such as JobSearch
    • national print media
    • national radio
    • an industry-specific national recruitment website
    • through subscription to LinkedIn Recruiter
    • if the sponsor is accredited, on the business’website;
  • the advertisements ran for at least 28 consecutive days;
  • the advertisement was in English and contained the title or description of the position, name of sponsor or recruitment agency, skills and qualifications requirements, and the annual earnings (unless those earnings are higher than $96,400).



Alternative evidence may be accepted instead of the above in some situations, such as where:


  • the application is for the purposes of an intra-corporate transfer from an overseas office of the business to its Australian entity;
  • the application is being lodged because the sponsor is changing due to a change in business structure;
  • the sponsor is able to demonstrate that the person is a distinguished talent whose skills are both unique and of exceptional benefit.


Sponsors should review their recruitment and hiring practices to ensure that where the successful job candidate requires a TSS visa, evidence of appropriate LMT in relation to the position is available.




Skilling Australians Fund in the TSS Program


The Skilling Australians Fund has been developed to replace the training benchmarks that existed in the 457 visa program. The training benchmarks required sponsors to demonstrate ongoing expenditure on training Australians in their business or the industry more broadly. Instead the Skilling Australians Fund requires sponsors to pay a levy each time they nominate a person for a TSS  visa, with the funds allocated to areas of training need in the Australian community and industries experiencing skills shortages.


The training benchmarks are no longer being assessed as a criterion for TSS sponsorship or nomination applications.


From 12 August 2018, a tax-deductible Skilling Australians Fund charge will be payable by sponsors at the time of lodgement of each TSS nomination application.


The funds will be used to provide training to disadvantaged Australians in areas of skills needs. This replaces the sponsorship obligation that existed in the 457 visa program to demonstrate a financial commitment to the training of Australian staff.


The SAF charge is payable upfront at the time of lodging a TSS nomination application. A payment facility will appear at the end of online nomination application forms along with the application fee payment.


How much must be paid?


The SAF charge amount is determined by the turnover of the business:



TSS visa period

Less than AUD10 million

$1,200 per year of visa requested

More than AUD10 million

$1,800 per year of visa requested


Nomination applications lodged in the following circumstances will attract the SAF charge:


  • to take over the sponsorship of a 457/ TSS visa holder; or
  • to change the occupation classification of a 457/ TSS visa holder, unless the reason for the change is due to a corporate restructure.


The SAF charge is refundable only where:


  • the visa application is refused on health or character grounds;
  • the visa holder fails to commence employment in their nominated position;
  • (for applications lodged after 17 November 2018) the TSS visa holder ceases within the first 12 months of employment in their nominated role (if the visa was approved for a period of 24 months or more); or
  • the nomination application is withdrawn from processing in certain circumstances.


Importantly, the SAF charge cannot be passed onto or recovered from any person, including the sponsored employee.


ENS and RSMS nomination applications are also liable for the SAF charge, Click here to learn more about the ENS and RSMS changes.




Genuine Position and Employment


For a nomination application to be approved the Department must be satisfied that the position:


  • exists as an ongoing role in the business;

  • fits the nature, size and structure of the business;

  • reasonably requires the dedication of a full-time employee; and

  • requires the performance of the duties of the nominated occupation as per ANZSCO.


Under policy, this requirement is considered met where the position is highly skilled, clearly fits within the activities of the business, there is evidence of a previous occupant in the position or new business opportunities requiring the position, and the LMT requirements have been met. The Department may assess and investigate further where there are doubts as to any of the above.


The nomination application form also requires sponsors to certify that the employment contract with the TSS visa holder/ applicant is compliant with the National Employment Standards. Sponsors should review their current employment contracts to ensure that they are able to provide this certification.




Non-Discriminatory Recruitment


Sponsors must not engage in recruitment practices that directly or indirectly discriminate against a person based on the immigration status or citizenship of the person, other than a practice undertaken to comply with a Commonwealth, State or Territory law. This criterion for approval of a nomination application is complemented by an ongoing sponsorship obligation to the same effect.


Conduct which may trigger further investigation include:


  • a high proportion of temporary visa holders in the business relative to Australians;
  • a high number of temporary visa holders of the same nationality; and/or
  • preferential recruitment of workers of a particular nationality or visa status.


However, the following are not considered discriminatory recruitment practices:


  • intra-company transfers from an overseas related business.
  • internal recruitment and promotion within Australia.
  • re-nomination of a currently sponsored person.


Sponsors should review their recruitment and hiring practices to ensure that they are compliant with these requirements.




Visa Criteria


The visa criteria test whether the applicant has the background to suit the nominated position and meet heath and character requirements. This section highlights some of the changes from the subclass 457 visa program.




Work Experience


TSS visa applicants must have at least two years’ full-time relevant work experience (or part-time equivalent) completed within the last five years. The work experience used to meet this criterion can overlap with the work experience used to demonstrate occupational skills.


In assessing the two year work experience requirement the Department has the discretion to consider:


  • relevant work experience outside the nominated occupation, but in a closely related occupation and at the same skill level.
  • experience gained as part of postgraduate study, clinical placements, internships or apprenticeships.






The exemptions to English language testing available in the 457 visa program have carried over to the TSS, including the exemption based on five years’ education at secondary level or above conducted in English. In the case of the exemption for positions with base salaries over $96,400, this is now only available where the visa applicant is entering Australia as an intra-corporate transfer.


If not exempt, visa applicants are required to achieve a minimum score on an English language proficiency test taken within the three years prior to the visa application date.


The proficiency standard for applicants  nominated for STSOL and ROL occupations remains at an average score on an IELTS test of 5.0, with no score in any test component lower than 4.5 (or the equivalent score in an alternative acceptable test).


Applicants nominated for MLTSSL occupations must achieve an average score on an IELTS test of 5.0, with no score in any test component lower than 5.0 (or equivalent).




Health Criteria


The health criteria for a TSS visa are broadly the same as for the subclass 457 visa.


All applicants must obtain and maintain adequate health insurance, and be free from active tuberculosis.


Unless waived, applicants must also be free from a health condition:


  • which presents a public health risk; or
  • the treatment of which would likely result in significant cost to the Australian community; or
  • the treatment of which would prejudice Australians’ access to that treatment.


One significant change has been made to the criteria for waiving the health criteria. In the 457 visa program the health criteria could only be waived if the applicant failed the heath criteria on the basis of potential significant cost of managing the condition and the sponsor agreed to underwrite those costs. In the TSS visa program, the visa applicant has the opportunity to obtain a waiver by demonstrating that the actual cost of managing the health condition will not be ‘undue’, which can take into account factors such as the visa applicant’s own financial resources and other financial support available to them.




Police Clearance Certificates


Applicants over the age of 16 years must provide a police record from each jurisdiction in which they have lived for 12 months or more in the 10 years prior to the application (since turning 16).


Accredited Sponsors are able to testify that their nominated applicants are of good character in lieu of providing a police clearance certificate.




Integrity Measures


The TSS program includes a range of measures designed to ensure the integrity of the program and that the visa is being used appropriately. In addition to the measures discussed below, these include:


  • increased information sharing with the Fair Work Commission and the Australian Tax Office to monitor for incidents such as underpayment of TSS visa holders;
  • publication on the Department’s website of sponsors who have been sanctioned for compliance breaches; and
  • longer processing times for sponsors who are flagged in the Department’s systems as having a history of non-compliance or other integrity concerns.




Adverse Information


Like the subclass 457 visa program, the TSS sponsorship regime allows for the imposition of sanctions against a sponsor where adverse information is known to the Department about the business’ suitability as a sponsor or nominator of visas, or about a person associated with the sponsor. Sanctions include a bar on being able to lodge sponsorship and nomination applications as well as financial penalties.


What is ‘Adverse Information’?


Adverse information includes (but is not limited to) the following and does not require a finding or guilt by a court or other competent authority:


  • a current investigation, action or proceedings in relation to a breach of a law of any Australian jurisdiction;
  • an administrative action (such as a warning) from a regulatory authority of any Australian jurisdiction;  
  • evidence that the person has provided documents or information to an immigration authority that was false or misleading; and/or
  • Insolvency.


Sponsors should ensure that they have appropriate systems, processes and procedures in place to comply with immigration, employment and other areas of law; and undertake a risk assessment of potential exposure to liability due to adverse information in relation to the sponsor entity and any associated persons.




Visa Condition 8607


TSS visas are granted subject to new condition 8607. This condition will be similar in effect to the condition 8107 which required 457 visa holders to work only in the occupation for which they were last nominated, however it will require TSS visa holders to work only in the occupation for which they were last granted a TSS visa. The effect is that TSS visa holders who wish to change occupations will need to lodge both a new nomination and TSS visa application.


Additional lead time will be required for role changes for TSS visa holders to allow for processing of both nomination and visa applications.