News & Insights

The Australian Labor Party has announced its plan to increase the wage of workers who hold temporary skill shortage (TSS) visas if it wins the upcoming Federal election.

New Policy 

Under the proposed policy, TSS visa holders must be paid a minimum salary of $65,000, in line with the median Australian wage. This would increase the Temporary Skilled Migration Income Threshold (TSMIT), which currently sits at $53,900, by 21%. The minimum pay rate would then be indexed each year, rather than being frozen, as it has been since 2013.

The changes are also set to include the establishment of an Australian Skills Authority which will restrict temporary work visas to jobs where there is a genuine skills shortage. Further, Labor will create a public register that outlines the number of visa holders engaged by individual workplaces and employers.

The changes are intended by Labor to reduce the incentive for employers to hire foreign workers as cheaper alternatives to Australians and to prevent the exploitation of vulnerable overseas workers.

Notably, earlier this month the Senate Legal and Constitutional Affairs References Committee recommended that the TSMIT should be increased to a minimum of at least $62,000, and that it be indexed annually in line with the average full-time wage.

Not all are in favour of the proposed changes. The Australian Chamber of Commerce and Industry has argued that the wage increase would make hiring foreign workers unaffordable in some regional areas, while others have pointed to a lack of evidence that TSS visa holders take jobs away from Australians.

Commentary 

If Labor wins the election, there will almost certainly be an increase to the TSMIT. While this may be warranted as the TSMIT has been frozen since 2013, the proposed 21% rise will be dramatic and will lock many bona fides employers out of the TSS visa program.

The policy to increase the TSMIT also seems to neglect the effect of the Annual Market Salary Rate criteria whereby any business wishing to employ a foreign worker on a TSS visa must demonstrate that the worker will be paid at least as much as an Australian worker is or would be paid.

The policy to ‘publish’ a register requires more detail and could be concerning to employers if they were forced to publish the number of foreign workers they employ. This policy would also considerably increase the regulatory burden on employers who need to engage foreign employees due to local skills shortages and otherwise abide by Australia’s employment laws. Further, the Coalition has highlighted the negative impact this would have on small and regional businesses.

If you would like further information in relation to this proposed policy and how it affects your business, or if you require tailored and practical assistance with any immigration queries you may have, please contact Kian Bone of our Employment, Safety and Migration team.

This article was written by Kian Bone, Special Counsel and Erin McLeod, Law Graduate – Employment, Safety and Migration.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.