Impact of 457 visa changes on accommodation providers and hotel operators
The Australian government’s decision to axe the 457 visa has received an ice-cold reception from the hospitality sector.
Although the change has been somewhat expected (since talk of ‘scaling back’ the number of industries eligible to host 457 visa workers has been on the agenda since 2013), the abrupt and complete termination of the program could spell disaster for the hospitality industry, which is heavily dependent on skilled overseas workers.
During this period of change, it is critical for HR professionals across the hospitality sector to take a moment to understand the changes and prepare accordingly. This includes a review of the facts and proactive communication to staff in a timely manner.
Getting into bed with the latest legislation
For the hospitality industry, as well as accommodation providers and hotel operators specifically, the first part of the legislation to consider is that current staff employed under the previous 457 visa conditions will not be impacted by the change. “Grandfathering” exempts current visa holders from the new rules, which is the first message to convey to staff. It is prospective applicants and the businesses sponsoring skilled migrants that will feel the greatest impact.
It’s important to remember that whilst the 457 program is being scrapped, it is also being replaced. From March next year there will be a new visa in town – the Temporary Skill Shortage (TSS) visa. The visa will be split into two streams; short-term (two years) and a medium-term (four years) stays. Meanwhile, the government has released an updated list of the occupations eligible for the new visas, scaling back the list from 651 to 435 occupations, to be reviewed every six months.
These changes in legislation are likely to hit the hospitality and leisure industry hardest as there will continue to be a high demand for skilled workers (with hotels and restaurants continuing to thrive) but there could be shortage of skills and individuals available to fill those positions.
With further changes anticipated, it’s vital that the Australian Hospitality and Leisure sector knows how to prepare. From the boardroom to the HR department, businesses need to focus on risk mitigation, seeking advice from industry bodies, peers and agencies, communicating with current employees and readying for business impact.
Understanding your risks… and talking about them
Considering these visa changes, HR must assess its ‘risks’ – namely those who are on current 457 visas. It is these employees who need direct support and assurance from HR. Regardless of the grandfathering clause, international employees will feel uneasy about the changes and are more likely to look overseas or back home to find alternative roles. Being able to address questions like ‘What does this mean for my current role and my future career prospects?’ will be critical areas of discussion to employees during the coming months.
Maintaining transparency and open communication lines during this period of change will help reaffirm trust in your organisation and show that you have staff interests at heart.
Seeking industry advice
These visa changes impact the entire hospitality and leisure sector; which is good news for accommodation providers and hotel operators as it means they will have the resources of key industry bodies, peers and unions behind them when looking to understand its impact. HR leaders must moderate between these key influencers and their staff to ensure they deliver the right level of information, and support to their staff, at the right time.
In addition to industry advice, accommodation providers and hotel operators will also need their HR teams to work with legal professionals throughout the hiring process, to mitigate further risk and ensure compliance with the new visa classes.
Lowering business impact
The planned Temporary Skills Shortage (TSS) visa is very similar to its 457 predecessor. It does, however, include the removal of over 200 roles from the occupations eligible for temporary visa status, making the new visa harder to attain. In addition to a ‘higher standard of English’ and ‘proper police record and criminal check’, the TSS will require two years of work experience and ‘mandatory labour market testing’. In addition, holders of the visa will not easily be able to apply for permanent residency.
In the recent federal budget, a new foreign skilled worker levy was also unveiled for employers. Businesses with a turnover of less than $10 million will have to make an upfront payment of $1,200 for every year they employ someone on a TSS visa, and make a one-off payment of $3,000 for each employee they sponsor for a permanent skilled visa.
Businesses with a turnover over $10 million per year will pay $1,800 annually for staff on TSS visas, and a one-off payment of $5,000 for each employee on a permanent skilled visa. The compulsory payments will be spent on the training and development of Australian apprenticeships and traineeships in high-demand occupations.
Data from the federal government shows cooks are the largest occupation class in the 457 visa program. Other hospitality workers in the top 15 occupations impacted include chefs and cafe or restaurant managers. With this in mind, the hospitality and leisure sector must act as a whole to demonstrate to reassure current and future temporary skilled workers of the value they bring to organisations across Australia.
Accommodation providers and hotel operators must remain at the centre of this conversation by maintaining open and collaborative communication lines now, and in the coming months – this will be imperative in providing peace of mind to staff. In addition, working with wider industry bodies, peers and unions, will ensure the sector as a whole can better assess skill shortages, and find the right people for these roles.
