How the changes to RSMS have affected small businesses

The changes introduced in March 2018 to the Regional Sponsored Migration Scheme (RSMS) (subclass 187) visa have changed the face of skilled migration to regional areas significantly, much to the detriment of regional employers. The RSMS is a permanent residence visa for skilled migrant workers to work in regional Australia on a full time basis. The visa offers two streams under the Temporary Residence Transition (TRT) visa stream and the second is known as the Direct Entry stream.

The new RSMS visa changes the previous RSMS visa in five main areas namely:

  • the occupation list.
  • work experience.
  • age of the applicant.
  • the time an applicant has to work on a temporary visa if applicable before the applicant can apply under the transitional stream for permanent residency under the RSMS.
  • Compulsory contribution by Regional Employers to the Skilling Australians Fund which is regulated by Federal Government.

Transitional Stream

Applicants are eligible through the TRT stream if they are a holder of a Temporary Skill Shortage visa or a Temporary Work visa and have worked for their employer for at least three out of the previous four years (before the nomination is made) in the same position their employer nominated them for the temporary visa.

Previously the required period of employment before they could be nominated for permanent residency was two years. The transitional arrangements under the two year rule applies if the applicant held a Temporary Work visa (applied for and which was subsequently granted) on 18 April 2017.

Occupation List

Under the old visa, the RSMS occupation list consisted of 673 occupations. Whilst the occupation list has not changed much for the RSMS Direct Entry stream, the temporary employer sponsored visa stream is limited to 243 occupations which limits the opportunity to regional employers to utilise the transitional pathway to employ skilled workers.

The occupation list for the Temporary visa stream lists only 184 occupations under the Medium and Long-Term Strategic Skills List (MLTSSL) which allows the applicant to transition to Permanent Residency under the RSMS visa.  In addition to this list, there are 59 occupations listed under the Regional Occupation list which will also allow the applicant to transition to the RSMS.

The new temporary visa occupation list has a further 242 occupations listed as Short Term Skilled Occupations which allows the employer to employ an employee for two years only at significant costs which will deter employers in regional areas from utilising the short term occupation list.

Age Limitation

Applicants can now no longer be older than 44 years of age which is a significant reduction in the age of employees as previously, applicants could be no older than 49 years of age.

Three Years Work Experience Required

The third major change to the visa requirements is that applicants who are applying under the Direct Entry stream are now required to have three years’ post qualification work experience whereas previously, no experience was required. This change means that recent graduates can no longer be employed on a permanent basis by Australian employers on completion of their studies.  The change also excludes many Working Holiday makers who would often choose to stay and work in a regional area on the expiry of their working holiday visa.

Skilling Australians Fund

In addition to the changes already mentioned, a new requirement has been introduced placing a further burden on employers and adding to an already stringent process. Nominating employers are now required to make a compulsory contribution to the Skilling Australians Fund. The levy amount depends on the size of the sponsoring business and the proposed period of stay of the overseas worker in Australia. For small businesses (annual turnover less than $10 million), the levy is AUD$3,000 once off and for other businesses (annual turnover of $10 million or more), the levy is AUD$5,000 once off.

Why did the RSMS change?

Federal government has stated that they have changed the eligibility requirements for the Temporary Employer Sponsored visa and the RSMS Permanent visa to better align with permanent and temporary migration programs as well as to address public concerns about the apparent displacement of Australian workers.

The visa changes do not only align with the Federal government’s migration campaign of ‘putting Aussie jobs first’ but it also aligns with the oppositions party’s ‘Stand up for Workers’ campaign as they intend for this visa to be a last resort for employers by limiting the occupations that can be sponsored, requiring positions to be advertised in Australia for local workers first, and forcing Regional Employers to compete with the Independent skilled migration program for workers.

More questions than answers

The question needs to be asked:  why are these stringent and very costly measures enforce on Regional Employers forcing them to compete with the Metropolitan areas for skilled workers and limiting the occupation list to what clearly reflects the ‘genuine skills needs’ of major cities of Australia?

The changes put into question the future of skilled migration, regardless of the political climate, and creates unquestionable challenges for businesses in regional areas. Businesses will therefore need to prepare themselves for significant additional costs to fill vacancies and the possibility of waiting times of up to 24 months to fill regional positions with skilled migrant employees.

Courtesy of Queensland Business News – Courtney Scales.

Administrator’s note:

For all enquiries relating to sponsoring a skilled work in regional areas, contact us at our Contact Us page.