What does the 457 visa abolition mean for SMEs?

What does the 457 visa abolition mean for SMEs?

Business owners have been mixed in their response to the government’s sudden announcement this week that it will abolish the 457 foreign worker visa. But what does it actually mean for SMEs?

The story proved to be the most read of 2017 thus far when it was announced a day after the Easter long weekend, as business owners from various sectors contemplated the ramifications of the move on their operations and employees.

“Bad, bad, bad,” said one person commenting on the story.

Others were more scathing of the visa having been implemented, rather than its abolition.

“About time for this false immigration policy,” said another.

A third commenter suggested that the move to abolish the 457 may be an indication the government is going to invest more in training core skills.

“I would like to see the overwhelming number of Australians looking for work in their own country trained up in the areas where there are skills shortages. We don't need to bring in any foreign workers at all.”Question marks

What does the change mean for businesses?

According to James Hyett, partner at Melbourne accounting firm McLean Delmo Bentleys and a registered migration agent, industries that will be most affected by the change are those in hospitality and retail, as well as the hair/beauty sectors. Yet a wide range of industries are likely to be affected.

“With the abolishment comes the application of a number of different caveats, which have the potential to significantly impact some businesses,” Mr Hyett said in a statement.

“There are three classes of caveats relating to work experience, regional locations and some occupation-specific caveats. Surprisingly, this also has application to some managerial and professional occupations.

“The occupation-specific caveats place considerable restrictions upon hospitality, retail and hair/beauty sectors (among others).

“There is also a tight focus on restricting access to the visa program for positions in smaller businesses which have less than $1 million turnover, fewer than five employees, or a nominated base salary of less than $90,000. Specifically, this applies to employees with the occupation of chief executive, managing director and corporate general manager.”

What can businesses do to prepare for the change?

Mr Hyett is urging business owners and managers to carefully consider the ramifications of the change to avoid getting caught out down the track, but also what impacts may be felt in the immediate term.

“In the short term, employers need to consider whether the immediate change in the occupation list will have any instant effect on their business. This includes any pending applications that are currently lodged, as well as how the business expects to use the 457 visa program in the coming months,” he said.

“In many instances, employers will still be able to sponsor expatriates under the 457 visa program, however changes to how the business uses the program may need to be implemented.

“Employers need to take stock and review the skills required to operate their businesses. The two-year short-term stream is designed to fill genuine skill gaps with foreign workers on a temporary basis, whereas the four-year medium-term stream is designed for a smaller pool of highly skilled and occupations with a critical need for talent. If access to these foreign worker streams is restricted, then alternatives to foreign workers must be explored.”

What does the 457 visa abolition mean for SMEs?
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