Changes to Training Requirements for Employer Sponsored Visas

The visas that will be affected by the training requirements are:

  • Temporary Work (Skilled) visa (subclass 457)
  • Employer Nominated Scheme (ENS) visa (subclass 186) – Temporary Residence Transition (TRT) stream
  • Employer Nominated Scheme (ENS) visa (subclass 186) – Direct Entry stream

 

Training benchmarks need to be met in applications for the above visas. As recently promised by the Department of Immigration and Border Protection, interim regulations will come into effect from 1 July 2017 that will detail what the DIBP will accept as training expenditure. March 2018 will see the replacement of the requirement with a contribution to a new “Skilling Australians Fund (SAF)”. The following training requirements will affect applications lodged on or after 1 July 2017.

 

Training benchmark A

Recent expenditure, by the business, equivalent to at least 2% of the payroll of the business, in payments allocated to a training fund that operates in the same or a related industry of the business. Expenditure must have occurred in the previous financial year or 12 months previous to the application, and must be evidenced by a receipt or letter provided by the relevant fund.

 

Applicable expenditure

  • an industry training fund: that is, a statutory authority responsible for providing funding for training of eligible workers in certain industries;
  • a fund managed by a recognised industry body that provides training opportunities in their industry and quarantines contributions to the fund for training purposes only; or
  • a recognised scholarship fund operated by an Australian university or TAFE college only.

 

Inapplicable expenditure
  • training funds operated by Registered Training Organisations (RTOs) or private individuals; or
  • funds that allocate a percentage or part of the contributions received to commissions or offer refunds for failed immigration applications.

 

Training benchmark B

Recent expenditure, by the business, equivalent of at least 1% of the payroll of the business, in the provision of training of Australian employees within the business.

The business is also required to show that the provision of training is related to the purpose of the business.

Expenditure must have occurred in the previous financial year or 12 months previous to the application, and must be evidenced by a receipt for the payment(s) or a contract for employment of the relevant individual for whom salary payments are being included within expenditure that can count towards the benchmark.

 

Applicable expenditure

Expenditure that can count towards this benchmark includes:

  • payments for Australian employees to undertake a formal course of study, including any reasonable and necessary associated costs (e.g. costs of travelling to the training venue or access an online training programme);
  • payments to Registered Training Organisations (RTOs) to deliver face-to-face training to Australian employees that will contribute to an Australian Qualifications Framework qualification;
  • purchase of an eLearning platform or standalone training software;
  • payments to cover the salary of Australian employees:
  • engaged by the business as apprentices or trainees under a formal training contract; or
  • who:
    • have completed an undergraduate or higher degree in a university within the last 2 years, and
    • are participating in a formal, structured graduate program for up to 2 years, or completing a professional year following their graduation
  • the salary of a person whose sole role is to provide training to Australian employees;
  • expenditure to attend conferences for continuing professional development.

 

Inapplicable expenditure

Expenditure that cannot count towards this benchmark includes:

  • on the job training that is not otherwise identified above as applicable expenditure for Training Benchmark B;
  • training that is not relevant to the industry in which the business operates;
  • training undertaken by persons who are principals in the business or their family members;
  • training that has a very low skill level having regard to the characteristics and size of the business;
  • induction training;
  • staff salaries apportioned to time spent undertaking online or other training courses;
  • purchase of software for use in normal duties;
  • membership fees;
  • purchase of books, journals or magazine subscriptions;
  • attending conferences for purposes other than continuing professional development; and
  • hiring a booth at a trades show, conference or expo.

Note: Australian employee is defined as an Australian citizen or Australian permanent resident.Do remember to keep important dated documents other than receipts. Where supplementary information is available, perhaps from the training provider, that would help clarify the content or purposes of training or explain its relevance to the business’s industry it is encouraged to also collect these documents.

 

Payroll

Payroll is defined as:

1. The total amount of the two payments specified below:

  • any wages, remuneration, salary, commission, bonuses, allowances, superannuation contributions or eligible termination payments, defined as wages in payroll tax legislation for the relevant State/Territory, that the applicant has paid to their employees during the same period; and
  • payments made to contractors or subcontractors during the same period if work provided by the contractor is related to the service/product provided by the applicant,

regardless of whether such payments are included for payroll tax purposes or not;

OR

2. If the applicant does not pay either of the types of payments specified above,

  • the total monetary values of the director’s salaries, fees and drawn payments; or
  • the actual profit of the business

 

These are fair changes and will help reign in the abuse of the employer sponsored visa programmes, and honest businesses and overseas workers should be protected. The Skilling Australians Fund (SAF) due to arrive in March 2018 however, will be prioritised towards apprenticeships and traineeships in occupations in high demand, areas with future growth potential, as well as rural and regional Australia. Focus industries include tourism, health and ageing, engineering, manufacturing, building and construction, agriculture and digital technologies.

Whilst this sounds positive for Australia’s community and economy, removing the opportunity for companies to meet training requirements through internal training results in the additional expenditure being a complete loss for the company. All the new implementations are incredibly discouraging for both overseas skilled workers as well as potential employers. In cases where smaller or start up companies are relying on foreign workers due to skill gaps or a niche business, the latest policies would put undue strain on their survival. Across the board, Australia may, over time, lose the intrinsic value of overseas relationships and the trade of knowledge and creativity between cultures that would have benefitted Australian in incalculable ways.

Find: Legislative Instrument – Specification of Training Benchmarks and Training Requirement

 

More about the SAF:

Assistant Minister for Vocational Education and Skills: Speech on SAF

Department of Education and Training: SAF Factsheet

 

 Karl Konrad
 Managing Director, Australian Immigration Law Services
 MARN 9904238

 Meet the team!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s