The Temporary Skill Shortage visa – a quick guide

Immigration and Citizenship Employment and Training 12 October 2022

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The Temporary Skill Shortage (subclass 482) visa (TSS visa) came into effect in March 2018, replacing the Temporary Work (Skilled) (subclass 457) visa. It is intended to help meet skills shortages in the Australian labour market while ensuring protection of local jobs, wages and conditions. It allows employers to sponsor overseas workers where no Australian workers are available. Visa holders can stay in Australia up to 2–5 years, as long as they continue to work for their employer. There is no cap on the number of visas which can be granted in any year.

There are 3 main streams for the visa: Short-term, Medium-term and Labour Agreement. The table below summarises the visa settings for applicants and employers, with further explanations given in the discussion that follows. These settings are current as at September 2022.

Requirements for sponsors (employers)	Requirements for applicants
Pay $420 to become a standard business sponsor Pay $330 nomination fee per worker Pay Skilling Australians Fund levy for each worker: $1,200 per year or part thereof for businesses with annual turnover less than $10 million $1,800 per year or part thereof for businesses with annual turnover $10 million or more Must undertake labour market testing unless an exemption applies Must demonstrate a genuine need for a paid employee to fill a skilled position If the worker will earn less than $250,000 a year, must pay them at least the Temporary Skilled Migration Income Threshold (TSMIT) ($53,900) and the annual market salary rate For the Labour Agreement stream, employers must have a labour agreement in place Employers may also use the Global Talent Employer Sponsored program	Must be nominated by an approved sponsor May only work for the nominating business in the nominated occupation (exemptions apply) Skills assessment may be required Must have at least 2 years relevant work experience Must have the required level of English Short-term stream: Visa fee from $1,330 May stay up to 2 years or up to 4 years if an International Trade Obligation applies (Hong Kong passport holders may stay up to 5 years) Be sponsored to work in an occupation on the short-term skilled occupations list May apply for only one subsequent short-term stream visa Medium-term stream: Visa fee from $2,770 May stay up to 4 years (Hong Kong passport holders may stay up to 5 years) Be sponsored to work in an occupation on the Medium and Long-term Strategic Skills List or the Regional Occupation List Labour Agreement stream: Visa fee from $2,770 May stay up to 4 years (Hong Kong passport holders may stay up to 5 years) Be nominated by an employer in an occupation with a labour agreement in place

Requirements for sponsors (employers)

Requirements for applicants

Pay $420 to become a standard business sponsor
Pay $330 nomination fee per worker
Pay Skilling Australians Fund levy for each worker:

$1,200 per year or part thereof for businesses with annual turnover less than $10 million
$1,800 per year or part thereof for businesses with annual turnover $10 million or more

Must undertake labour market testing unless an exemption applies
Must demonstrate a genuine need for a paid employee to fill a skilled position
If the worker will earn less than $250,000 a year, must pay them at least the Temporary Skilled Migration Income Threshold (TSMIT) ($53,900) and the annual market salary rate
For the Labour Agreement stream, employers must have a labour agreement in place
Employers may also use the Global Talent Employer Sponsored program

Must be nominated by an approved sponsor
May only work for the nominating business in the nominated occupation (exemptions apply)
Skills assessment may be required
Must have at least 2 years relevant work experience
Must have the required level of English

Short-term stream:

Visa fee from $1,330
May stay up to 2 years or up to 4 years if an International Trade Obligation applies (Hong Kong passport holders may stay up to 5 years)
Be sponsored to work in an occupation on the short-term skilled occupations list
May apply for only one subsequent short-term stream visa

Medium-term stream:

Visa fee from $2,770
May stay up to 4 years (Hong Kong passport holders may stay up to 5 years)
Be sponsored to work in an occupation on the Medium and Long-term Strategic Skills List or the Regional Occupation List

Labour Agreement stream:

Visa fee from $2,770
May stay up to 4 years (Hong Kong passport holders may stay up to 5 years)
Be nominated by an employer in an occupation with a labour agreement in place

Employer requirements

Employers must meet a range of requirements before they are able to sponsor migrant workers.

Employers must be approved as a standard business sponsor, which requires paying a fee, demonstrating they are running a legally established and operating business, and having ‘a strong record of, or a demonstrated commitment to, employing local labour’. To maintain their status, employers must continue to meet sponsorship obligations.

Employers must undertake labour market testing to demonstrate they cannot find an Australian resident to do the work. Labour market testing generally requires advertising the position for at least 4 weeks within the 4 month period immediately prior to lodging the nomination application (part of the visa application process). The advertising must meet certain requirements, including that it be via methods or media with national reach in addition to being on the Workforce Australia website.

Labour market testing applies to labour agreements (see below), but there are flexible arrangements in place for some agreements, for example, a longer advertising window for jobs in certain regional areas.

There are some exemptions to labour market testing requirements where an International Trade Obligation applies. There are also alternative requirements in place in specific cases, including if the salary paid will be over $250,000; for a small number of specified professions; or for intra-corporate transfers.

Employers must pay the employee at least the annual market salary rate and above the Temporary Income Skilled Migration Threshold (TSMIT, set at $53,900).

The Skilling Australians Fund levy

Employers sponsoring a visa applicant must pay the Skilling Australians Fund levy. The fund aims to ensure that businesses that sponsor migrant workers are also benefitting Australian workers. The levy must be paid for each worker, as noted in the table above (see the Department of Home Affairs webpage on costs of sponsoring for further details).

The fund supports projects to provide training opportunities including apprenticeships and traineeships, pre-apprenticeships and pre-traineeships, and other employment-related training opportunities (see the Skilling Australians Fund fact sheet for further information).

The Skilled Occupation List

The vacancy the employer wishes to fill must be for an occupation on the Skilled Occupation List. The list specifies occupations for eligibility for a range of skilled visas (permanent and temporary, including the TSS), and is aimed at identifying occupations where there are skills gaps in the Australian labour market which would be appropriate to fill using skilled migration. The list is revised periodically by the National Skills Commission.

The combined Skilled Occupation List is made up of 3 main lists: the Short-term Skilled Occupation List (STSOL), the Medium and Long-term Strategic Skills List (MLTSSL), and the Regional Occupation List (ROL). There is also currently a Priority Migration Skilled Occupation List (PMSOL), introduced as a temporary measure in September 2020 in response to the COVID‑19 pandemic to facilitate the entry of workers in critical sectors.

Applicants for the Short-term stream of the TSS visa must have an occupation on either the STSOL or the PMSOL. Applicants for the Medium-term stream must have an occupation on either the MLTSSL or the PMSOL. The lists do not apply to applicants for the Labour Agreement stream, but applicants must meet the requirements to be sponsored by an employer with a labour agreement in place.

Labour Agreements

If an employer cannot meet their skills needs through Australian workers or existing skilled visa programs, they may be able to use a labour agreement. Labour agreements are negotiated between employers (or a state, territory or regional authority) and the Department of Home Affairs (representing the Australian Government). There is a range of types of labour agreements, covering designated regions, industries (largely in the agricultural sector), specific large projects or specific companies. The agreements function as a contract, setting out terms that employers must comply with in addition to sponsorship obligations similar to the standard business sponsorship obligations (see above).

Labour agreements use existing visas, including the TSS (and permanent skilled visas), but may provide concessions in relation to the standard requirements or occupations for those visas. The annual market salary rate still applies, so that a worker under a labour agreement should not be paid less than an equivalent Australian worker, even if the labour agreement allows them to be paid below the TSMIT.

Employment conditions and entitlements

Employers of TSS visa holders must ensure that the terms and conditions of employment are no less favourable than those they provide to Australian citizens or permanent residents performing equivalent work in their workplace. This includes minimum wages, hours of work and leave entitlements.

The Fair Work Ombudsman website has information on the workplace rights and entitlements for 482 and 457 visa holders and a page for migrant workers on how to access help regarding unfair workplace treatment.

Requirements for applicants and visa conditions

TSS visa applicants must be nominated by an approved sponsor, prove they have the required skills and experience to meet the relevant occupation as listed on the Skilled Occupation List (such as via a skills assessment if required), and meet English language requirements. All visa applicants must generally comply with standard visa requirements including health, character and security checks.

TSS visa holders must work only for their sponsor or associated entity, and only in the occupation they were nominated for, unless exempt. If their employment ends, they have 60 days to find a new employer to sponsor them, or they must leave Australia.

TSS visa holders (primary visa holders) may bring dependent family members (secondary visa holders) to Australia with them. These family members can live, study and work in Australia, with no restriction on the kind of work they can do.

TSS visa holders, like other temporary visa holders, are generally not entitled to social security benefits or Medicare, and must have adequate health insurance.

The employer may sponsor the worker for further TSS visas after the time limit on the initial visa. The employer may also sponsor the TSS visa holder for permanent residence through the Employer Nomination Scheme (subclass 186) visa, if the employee has been working for them for at least 3 years and the occupation is on the Medium and Long-term Strategic Skills List or the Regional Occupation List. The Short-term stream of the TSS visa usually allows only one subsequent TSS application and no pathway to permanent residence; however, for a 2-year period from 1 July 2022, this pathway is open to Short-term stream applicants.

Medium-term and Labour Agreement TSS visa holders are also able to apply for other kinds of visas if they meet the criteria.

Visa trends

The following chart shows trends in TSS and subclass 457 visas granted and visa holders in Australia over the past 10 years (‘snapshot’ figures are as at 30 June for each year). The figures are for primary visa holders only.

The effects of the COVID-19 pandemic over the past 3 financial years are evident. The dip in 2017–18 possibly reflects the changeover between the subclass 457 and the TSS visas; however, see also this 2018 Parliamentary Library FlagPost, which noted a number of possible factors influencing trends in subclass 457 visa applications.

Figure 1 Temporary Skill Shortage and subclass 457 visas: numbers of visas granted and visa holders in Australia, 2012–13 to 2021–22

Source: Department of Home Affairs, Temporary Work (skilled) visa program, data.gov.au.

Further resources

Home Affairs visa data and reports

The Department of Home Affairs issues quarterly statistical Temporary resident (skilled) reports on its website, including a detailed report and a separate 3-page summary. Pivot table data is available at data.gov.au. These reports cover the TSS and its predecessor, the subclass 457 visa.

Recent parliamentary inquiries

A number of recent parliamentary inquiries have examined the TSS visa as part of their remit. The reports cover considerations, stakeholder views and recommendations on settings, including the TSMIT, labour market testing, the Skilling Australians Fund levy, the Skilled Occupation List, exploitation of migrant workers and pathways to permanent residence.

The Select Committee on Temporary Migration tabled its report in September 2021. The report considers the TSS visa in addition to other temporary visas (including student, working holiday, seasonal and temporary graduate visas). It also discusses challenges in addressing skills shortages and labour market gaps.

Chapter 4 discusses workplace exploitation of temporary visa holders, including a summary of previous inquiries, the Migrant Workers’ Taskforce, the role of the Fair Work Ombudsman, and the Migration Amendment (Protecting Migrants Workers) Bill 2021, which was at that time released as an exposure draft. The Bill lapsed at the dissolution of the 46th Parliament. For more on the Bill, see the Library’s Bills Digest.

The Inquiry into Australia’s skilled migration program focused on permanent skilled visas but included consideration of the TSS visa. Its final report was tabled in August 2021.

The Legal and Constitutional Affairs References Committee tabled its report on the Inquiry into the effectiveness of the current temporary skilled visa system in targeting genuine skills shortage in April 2019. The report looks primarily at the TSS visa and the previous subclass 457 visa but also notes other temporary work visas (subclasses 400, 403 and 408). It considered a number of issues raised in later (and earlier) reports, but at that point the TSS visa had not been in place very long, so the committee recommended further monitoring.

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