As part of the bundle of legislative and policy reforms introduced to Australian work visas, including the Temporary Work (Skilled)(subclass 457) visa, on 1 July 2017 the Department of Immigration and Border Protection (DIBP) changed the definition of training for 457 sponsorship.
In applying to register as a 457 standard business sponsor, businesses are required to meet the requisite training benchmark. The training requirements include the following:
- For a business operating for less than 12 months, an Auditable Training Plan must be provided.
- For a business operating for more than 12 months, the options are as follows:
- Training Benchmark A: The business must demonstrate that 2% of payroll was placed in an industry training fund; or
- Training Benchmark B: The business can show that 1% of payroll expenditure was spent on training Australian staff.
Outline of the Key Training Definitional Changes
The key changes on 1 July 2017 include clarification of the following requirements:
- Definition of what constitutes payroll expenditure for a business; and
- Clarification of what can and cannot be counted towards training expenditure in order to meet Training Benchmark B.
What constitutes payroll expenditure?
The Federal Government has clarified that from 1 July 2017 payroll has an expansive definition and is considered to be one of the following:
- The total amount of wages, remuneration, salary, commission, bonuses, allowances, superannuation contributions or eligible termination payments and payments made to relevant contractors or subcontractors; or
- If the sponsoring business does not pay wages, contractors and subcontractors then the monetary value of director’s salaries, fees and drawn payments; or the profit of the business.
What Constitutes Training for Training Benchmark B?
The Federal Government has clarified that the following constitutes training for the purposes of Training Benchmark B:
- for Australian employees to undertake a formal course of study, including any reasonable and necessary associated costs (e.g. costs of travelling to training venue) or access an online learning programme;
- to RTOs to deliver face-to-face training to Australian employees that will contribute towards an Australian Qualification Framework qualification;
- to purchase an eLearning platform or standalone training software; or
- to cover the salary of:
- Australian employees engaged by the business as apprentices or trainees under a formal training contract;
- Australian employees who have completed an undergraduate or higher degree in a university within the last 365 days; or
- a trainer responsible for training Australian employees on a full time basis.
What Does Not Constitute Training for Training Benchmark B?
The Federal Government has clarified that the following cannot be counted towards training expenditure for the purposes of Training Benchmark B:
- on-the job-training;
- induction training;
- staff completing online training courses;
- purchasing software for use in normal duties;
- membership fees;
- purchasing books, journals or magazine subscriptions;
- attending conferences for purposes other than continuing professional development;
- hiring a booth at a trades show, conference or expo
- training only undertaken by persons who are:
- not Australian citizens or permanent residents;
- principals in the business or their family members;
- training that is not relevant to the industry in which the business operates or has a very low skill
- level having regard to the characteristic and size of the business.
Proposed Future 457 Sponsorship Training Changes
Significant reforms are currently underway to the Australian visa program and when the new Temporary Skills Sponsored (TSS) visa replaces the subclass 457 visa, the Federal Government has announced that the current training provisions will be replaced by a work visa levy to be paid by standard business sponsors per worker.
It is crucial to each standard business sponsorship application that the correct evidence is provided to demonstrate meeting training benchmarks.
The information on this website is intended only to provide a summary and general overview on relevant matters. It is not intended to be comprehensive nor does it constitute legal advice. You are advised to seek legal or other professional advice before acting or relying on any of the content contained in this website.