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What is the deal with training benchmarks?

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Companies need to show they have met training benchmarks when applying for a renewal of their sponsor status

With the introduction of the Skilling Australians Fund (SAF) Levy in August 2018, you may be a little confused about your business’s continuing obligations regarding training benchmarks. We don’t blame you. Read on to see our breakdown of whether you’ll still have to adhere to training benchmark requirements, and in what situations. For more advice tailored specifically to you, contact McKkr’s for free advice regarding Training Benchmarks.

What is the SAF Levy?

The Skilling Australia Fund (SAF) Levy applies to new nominations made after 12th August 2018 only on subclass 482, 186 and 187 visas. It is a levy payable on nomination by employers and is designed to contribute to the skills development of Australians by funding more training programs and apprenticeships in partnership with State and Territory governments. It was introduced alongside the abolition of the subclass 457 visa and the transition to the new subclass 482 Temporary Skill Shortage (TSS) visa.

Before the SAF levy, all business sponsors of temporary overseas workers were required to spend either 1 per cent of their annual payroll on training their Australian workers (Training Benchmark B) or contribute 2 per cent to an approved training fund (Training Benchmark A).

Even though the SAF Levy has now come into effect, you may still be obligated to keep up with your obligations under the training benchmark system in some cases.

In what situations does a company still have to meet training benchmark obligations?

There are three broad scenarios in which your company may need to continue to maintain your financial obligations to meet training benchmarks. These are:

  • If you currently employ, or employ in the future, an individual on a 457 visa.
  • If you currently employ anyone on a 482 visa which was lodged before 12th August 2018.
  • If you are a 457 visa “approved business sponsor”, meaning you currently sponsor someone on a 457 visa, and you want to nominate workers on who are on 482 visa or 186 visa or 187 visa lodged after 12th August 2018.
  • If you previously employed someone on a 457 visa or a 482 visa (lodged before 12th August 2018)

Remember, the training benchmarks are calculated with reference to the employment start date of the sponsored employee. Training benchmarks will have to be met for the entirety of the year following the day your company was approved as a business sponsor, accruing on the anniversary of their approval as a business sponsor, even if an employee only actually works there for a small portion of the year.

For example, if you are approved as a business sponsor on 1st February 2017 and an employee on a 457 visa begins work at your company on 1st August 2017 and then quits on 15th September 2018, you will be obligated to meet training benchmark obligations for two full sponsorship years: 1st February 2017- 31st January 2018 and 1st February 2018 – 31st January 2019.

How and when do I need to show I’ve met training benchmark obligations?

Companies need to show they have met training benchmarks when applying for a renewal of their sponsor status, when applying to nominate a potential employee on a 457 visa, or when applying to nominate a person on a 482, 186 or 187 visa IF they are currently an approved sponsor of an employee on a 457 visa or an employee on a 482 visa who’s application was lodged before 12th August 2018 (before SAF was implemented).

Do I have to change the way I provide training to my employees under Training Benchmark B?

No. You can still provide training to people within your company under Training Benchmark B. You can offer this training to employees who are not Australian citizens and residents as well, provided that you are also offering the training to those who are Australians. These specifications haven’t changed.

Please note that this is general advice and is not a substitute for tailored migration advice suited to your particular situation. McKkr's is the leader in Training Benchmark B in Australia and knows what it takes to keep your clients compliant with their training benchmark obligations. We offer a free auditable structured training plan for all of our clients. Companies and agents are welcome to contact us to find out more.