Permanent Employer Sponsored Visa Program

The information on this page has been updated to reflect new regulations in effect from 18 March 2018. See our Newsflash for more details.

Purpose

Allows employers to sponsor skilled overseas workers for permanent residence to fill vacancies in their business.

Overview

There are two permanent employer sponsored visa categories:

• Subclass 186 – Employer Nomination Scheme (ENS), and
• Subclass 187 – Regional Sponsored Migration Scheme (RSMS).

The ENS has three different streams: The Temporary Residence Transition stream, the Direct Entry stream, and the Agreement stream. The RSMS has two streams: The Temporary Residence Transition stream and the Direct Entry stream.

Key stages

Both the ENS and RSMS have two application stages:

1. Nomination by an employer
2. Visa application by the nominee/visa applicant

Stage 1: Nomination by the employer

To nominate a worker, the employer must:

• Be actively and lawfully operating a business in Australia.
• Have a genuine need for a paid employee to fill a skilled position.
• Offer a skilled position in the nominee’s field that is full time and ongoing for at least two years.
• Ensure the prospective overseas employee will be paid annual earnings at least equivalent to what an Australian citizen or permanent resident earns for the same work (ie. the annual market salary rate).
• Have the capacity to employ the nominee for at least two years and to pay the annual market salary rate for each year.
• Provide employment conditions (other than earnings) that are no less favourable than those provided to Australian workers.
• Comply with Australian immigration and workplace relations laws.
• Have no adverse information known about their business or any person associated with their business.

Stage 2: Visa application by the nominee/visa applicant

To apply for an ENS or RSMS visa you must:

• Have been nominated by an approved Australian employer within the six months before you apply
• Be under the age of 45 at the time of application
• Have the required skills and qualifications for the position
• Have appropriate English language skills
• Meet health and character requirements
• Meet the requirements of the stream in which you apply

The RSMS generally mirrors the ENS, but with some variations that reflect a focus on positions in regional Australia. For example, you can apply for an RSMS visa only after being nominated by an employer in regional Australia.

Below is a summary of the criteria for each stream of the ENS and RSMS.

ENS Subclass 186 visa	RSMS Subclass 187 visa
Temporary Residence Transition (TRT) stream
For Subclass 457 visa holders and/or Subclass 482 visa holders in the Medium-term stream who have worked for at least: three out of the four years (before the nomination is made) in the same occupation with their nominating employer; or two out of the previous three years before the nomination is made, if transitional arrangements apply because you either held, or were an applicant for, a subclass 457 visa (which was subsequently granted) on 18 April 2017.
Criteria include: Age: Must be under the age of 45 (unless exempt or transitional arrangements apply). English language requirements: International English Language Testing System (IELTS) (or equivalent test) score of 6 in each component ie. Competent English (unless exempt). Health: Must meet certain health requirements. Character: Must meet certain character requirements. Skills: Must have the required skills and qualifications for the position. Generally, skills assessment is not required for the TRT stream. Occupation: Must nominate an occupation on the Medium and Long-term Strategic Skills List (MLTSSL). Additional occupations are available to support regional employers for the RSMS. Salary: Must be paid annual earnings at least equivalent to what an Australian citizen or permanent resident earns for the same work (ie. the annual market salary rate), and that meets the Temporary Skilled Migration Income Threshold (TSMIT).
Direct Entry (DE) stream
For people who have never, or only briefly, worked in Australia, or are temporary residents who do not qualify for the Temporary Residence Transition stream, or are applying directly from outside Australia.
Criteria are the same as above, under the TRT stream.
Labour Agreement stream	N/A (no labour agreement stream for 187)
For people sponsored by an employer through a labour agreement.	N/A
Criteria: Must meet the age, skills and English language requirements stated in the agreement.	N/A

Full details of visa application and nomination requirements can be found here:

• ENS (Subclass 186)
• RSMS (Subclass 187)

Transitional arrangements for certain existing 457 visa holders nominated for a permanent visa in the TRT stream (grandfathering arrangements)

New regulations implemented on 18 March 2018 toughened eligibility criteria with regards to age, employment history, salary, English language, and available occupations. This impacted temporary visa holders applying for permanent residency through the Temporary Residence Transition (TRT) stream of the ENS or RSMS visas.

The new TRT stream requirements do not apply to those who, on 18 April 2017 (the day the changes were announced):

• held a 457 visa, or
• had applied for a 457 visa that was subsequently granted.

For these people, the following criteria still apply:

Subclass 186/187 visas	Temporary Residence Transition (TRT) stream (old criteria)
Qualifying work period	Applicants must have worked for at least two out of the three years (before the nomination is made), while holding a Subclass 457 visa in the same position with their nominating employer.
Age	Must be under the age of 50.
English language requirements	International English Language Testing System (IELTS) (or equivalent test) score of 6 in each component ie. Competent English.

Still to come: Skilling Australians Fund levy

What is it?

A new nomination training contribution charge, referred to as the Skilling Australians Fund levy (‘SAF levy’), is currently being debated in Parliament (see the Migration Amendment (Skilling Australians Fund) Bill 2018). 

This levy replaces former training benchmarks and will be payable by sponsors of overseas workers under the Temporary Skill Shortage (TSS) visa, the ENS (Subclass 186) visa or the Regional Sponsored Migration Scheme (RSMS) (Subclass 187) at the time of nomination.

How much will it cost?

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. 

How should current or potential business sponsors prepare?

The costs that will be imposed when the SAF levy is implemented are substantial, particularly for businesses with higher turnovers. At this stage, there is no clear guidance as to whether refunds would be given if say, a visa holder leaves after the SAF levy has been paid upfront. Employers should take into account the possibility of no forthcoming refunds in this case.

Businesses should be prepared to provide accurate records of levy payments (possibly through documents such as annual tax returns or Business Activity Statements). To determine the contribution amount and to prove compliance with sponsorship obligations, businesses will likely need details around annual turnover, number of TSS visa holders and any employee terminations. 

What transitional arrangements are there for approved sponsors?

For ENS and RSMS applications lodged on or after 18 March 2018:

• ENS DE stream nominations will still need to meet the training benchmark requirements.
• ENS/RSMS TRT stream nominations will still need to meet training compliance requirements – although a flexible approach will be taken to assessing such compliance during the period between July 2017 and July 2018 consistent with current subclass 457 policy arrangements.

Note:

• Training compliance information will no longer be collected on ENS/RSMS application forms from the date of SAF levy implementation.
• Pipeline TRT stream nominations that remain on hand when the SAF levy is implemented will still be assessed against training compliance requirements where the training obligation was in place for the full year of their standard business sponsorship. There will be no assessment of compliance for part-years before SAF levy implementation.

We will update our readers on the specifics of the SAF levy when legislation is passed by Parliament. For more details on the new levy, read our Newsflash here.