News Flash

Employers brace for impact as Skilling Australians Fund starts 12 August 2018

09-Aug-2018

Employers should be prepared to pay significantly more for sponsoring foreign workers. New regulations confirmed that the Skilling Australians Fund (SAF) will be implemented from 12 August 2018. We previously wrote about the SAF in a previous Newsletter, explaining that businesses should budget in additional costs and be ready to provide accurate records

From 12 August 2018, employers sponsoring workers on certain visas will be required to pay the SAF ‘Training Contribution Charge’ (known as a levy) at the time of lodgement of each nomination. These visas include:Temporary Skill Shortage (TSS) visa

• Employer Nomination Scheme (ENS) (subclass 186) visa
• Regional Sponsored Migration Scheme (RSMS) (subclass 187) visa
• Nominations to transfer an existing Subclass 457 (or 482) visa holder to a new employer
• Temporary Activity visa (subclass 408)

Employers with current nomination applications ready to go, complete with documentation, should lodge these before 12 August 2018. However, employers who still have a significant amount of work to do on their nomination applications (eg. sufficient advertising to meet labour market testing requirements) and will not meet that deadline will likely need to budget in the new levy costs.

How much will the levy cost?

The levy will be collected as part of the nomination application process.

Businesses with turnover of less than $10 million per year will be required to make:

• an upfront payment of $1,200 per visa per year for each employee on a TSS visa
• a one-off payment of $3,000 for each employee being sponsored for an ENS visa or RSMS visa.

Businesses with turnover of $10 million or more per year will be required to make:

• an upfront payment of $1,800 per visa year for each employee on a TSS visa
• a one-off payment of $5,000 for each employee being sponsored for an ENS visa or RSMS visa.

Labour market testing (LMT)

In addition, the SAF legislation allows the Minister to set certain labour market testing (LMT) requirements. Currently, for a nomination to be approved, the Department of Home Affairs (DHA) must be satisfied that a suitable qualified and experienced Australian worker is not available to fill the nominated position. Actions employers must take to satisfy this requirement include:

• Advertising the position in Australia not more than 4 months before lodging a nomination application;
• Ensuring the advertising continues for a minimum of 28 consecutive days;
• Ensuring the advertising is targeted so that a significant proportion of suitably qualified and experienced Australians will be informed of the position;
• Including the skills and experience appropriate to the position in the advertisements.

More details about LMT requirements can be found on the DHA’s website.

Do I still have to worry about Training Benchmarks?

The SAF levy will replace the current training benchmark requirement ie. Employers will not be simultaneously subject to the SAF levy and the existing training benchmarks.

This means that:

• Standard business sponsorship applications lodged on or after 12 August 2018 will not be assessed for compliance with the training benchmarks; and
• Standard business sponsors will not be required to comply with the repealed training benchmarks in relation to a period of 12 months ending on or after 12 August 2018.

However, standard business sponsors must still retain records of training benchmark compliance for any full year prior to 12 August 2018.

ENS and RSMS

Nominations made on or after 12 August 2018 under the Temporary Residence Transition stream in the Subclass 186 visa or Subclass 187 visa will not be subject to training expenditure obligations. However, for nominations lodged before 12 August 2018, previous training obligations still apply.

What about refunds?

Refunds of the nomination fee and nomination training contribution charge are available on certain grounds:

• the nomination cannot be approved for specified reasons and is withdrawn before a decision is made;
• the nomination is approved but the nominated worker is refused a visa on health or character grounds;
• the nomination is approved and the nominated worker is granted a visa, but does not commence work in the position;
• the nomination is approved and the nominated worker is granted a visa and commences work in the position, but the employment ends within 12 months. This ground only applies to nomination for the purposes of the temporary visas, and the partial refund excludes the nomination training contribution charge for the first year of the nomination.

Changes to sponsorship obligations

To gain approval as a standard business sponsor or temporary activities sponsor, businesses need to comply with a list of sponsorship obligations. A full list of sponsorship obligations for the TSS visa can be found here, and here for temporary activities sponsor.

Changes to be aware of in relation to the SAF levy include:

• Obligation to keep records: Sponsors must retain records to substantiate the figure for annual turnover of the business, in order to facilitate the assessment of the applicable nomination contribution training charge.
• Obligations not to recover or transfer costs to another person. The nomination training contribution is a cost that must not be transferred to or recovered from a sponsored worker or a third party.

What impact will this have overall?

The government has made clear that they expect the costs imposed by the SAF levy to be less than those imposed by the previous training benchmarks for most businesses. However, it is also true that the not insignificant costs associated with the SAF are likely to reduce the demand for employer-sponsored visas amongst Australian businesses. Taken together with the overall decrease in visa approval rates, we would expect further downward pressure on the number of worker visas issued.

For more information on how our immigration specialists can assist with your business needs, please get in touch with us today.


Source: Federal Register of Legislation