186 Employer Nomination, Labour agreements and the nomination categories
To sponsor an employee for a permanent residency visa in Australia you need to meet the criteria under the 186 Employer Nomination Scheme. There are three nomination categories, Direct Entry, Transition and Labour Agreement.
- 186 Direct Entry – visa applicant required skill assessment and 3 years work experience
- 186 Transition – visa applicant has already worked for the sponsoring employer for 2 (some 457 visa holders) or 3 years whilst holding a 457 or 482 visa.
- Labour Agreement – criteria established in the negotiated Labour Agreement
Common criteria
The nominating employer must be actively and lawfully operating in Australia.
For an ENS employer nomination, the position may be located anywhere in Australia, and the nominating business may be located anywhere in Australia.
Start-up businesses
For the purposes of the regulatory criterion requiring active operation, a start-up business is one that has been in active operation for a period less than 12 months. A business would be considered to have commenced ‘active operation’ once the ABN and/or ACN comes into effect and the entire infrastructure necessary for the activities of the business is in place and the business has commenced providing services to customers.
Established businesses
A business that has been actively operating for a period of more than 12 months should be able to provide appropriate financial documentation to support their claims of active operation.
The business should be able to submit:
- either
- a balance sheet (statement of position) for the most recently concluded fiscal year (with comparative figures for previous fiscal year), and profit and loss statement (statement of performance) for the most recently concluded fiscal year, with comparative figures for the previous fiscal year or
- business tax returns for the most recently concluded fiscal year
and
- if the fiscal period to which the financial statements or tax returns submitted relate ended more than 3 months before the nomination was lodged – a business activity statement (BAS) for each complete quarter between the end of the fiscal period and the date the nomination was lodged.
Under the Temporary Residence Transition and Direct Entry streams respectively, require that the visa applicant will be employed on a full-time basis in the nominated position for at least 2 years from the date of visa grant and that the terms and conditions of employment not preclude extension of the period of employment.
The nominator must provide a copy of the proposed employment contract to enable verification. The employment contract must include:
- the name of the nominee
- the position title and duties
- if employment is for a specific period – the period of employment
- the salary and employment conditions, including access to statutory entitlements.
If the employment contract covers a specific period of 2 years, the 2 year period of employment will commence from:
- the date of visa grant if the nominee is already working in the nominated position or
- the date of commencement of employment in all other circumstances.
The Department of Home Affairs needs to be satisfied that the nominator has sufficient financial capacity to comply with the requirement to provide the nominee with at least 2 years of full-time employment. Due to the economic impact of Covid this criteria must be demonstrated for all 186 nominations.
Nominations under the Temporary Residence Transition and Direct Entry streams respectively, require the terms and conditions applicable to the position to be no less favourable than the terms and conditions that are provided to or will be provided to an Australian citizen or Australian permanent resident performing equivalent work in the same workplace at the same location.
The salary offered must be the market salary. If the nominator employs Australian citizens or permanent residents in the occupation to which the nominated position relates, the salary offered to the Australian employees is the market salary.
If the nominator does not employ Australian citizens or permanent residents in the nominated occupation the market salary rate must be determined with regard to relevant market information:
- any fair work instrument, State/Territory industrial instrument or transitional instrument that would apply to Australian citizens or Australian permanent residents in the same workplace at the same location.
- information in relation to statutory minimum entitlements, fair work instruments, State/Territory industrial instruments and transitional instruments that apply to Australian citizens or Australian permanent residents in similar workplaces
- local knowledge and evidence of appropriate terms and conditions of employment including information from:
- employer associations and
- unions
- broader labour market data including:
- the ABS Employee Earnings and Hours Survey
- the Australian Government’s Job Outlook
- remuneration surveys and
- job vacancy advertisements.
The market salary rate must also be above the TSMIT which is currently $70,000. Important to note, if the Award is below the TSMIT you cannot use this to demonstrate the market salary rate.
Employer Nomination Temporary Residence Transition stream
You may be able to nominate a skilled worker for this visa under this stream if you are an Australian standard business sponsor and meet all of the below:
- the skilled worker holds a:
- Temporary Skill Shortage (TSS) visa (subclass 482) (in the Medium-term stream unless transitional arrangements apply)
- Temporary Work (Skilled) visa (subclass 457) (not granted under labour agreement arrangements) or
- relevant associated bridging visa.
- a subclass 482 (TSS) visa granted for an occupation on the short-term skilled occupation list or the Regional Occupation List and:
- was in Australia for at least one year between 1 February 2020 and 14 December 2021 and
- meets all other nomination and visa requirements for the TRT stream
This pathway is only available for two years from 1 July 2022
- the skilled worker has worked for you in Australia full-time on their subclass 457 and/or TSS visa(s) for at least:
- three out of the previous four years (before the nomination is made)
- two out of the previous three years (before the nomination is made), if transitional arrangements apply because they either held, or were an applicant for, a subclass 457 visa (which was subsequently granted) on 18 April 2017 in the same position that you have nominated them for.
- the skilled worker will work directly for you unless nominated in an occupation specified in a legislative instrument (certain medical occupations).
- the nomination identifies an occupation (for the position) that:
- has the same four-digit occupation unit group code as the TSS or subclass 457 visa approved occupation and
- wish to fill a position that is an occupation that remains listed for the relevant visa program unless transitional arrangements apply because they either held, or were an applicant for, a subclass 457 visa (which was subsequently granted) on 18 April 2017 in the same position that you have nominated them for
- you actively and lawfully operate a business in Australia.
- you have a genuine need for a paid employee to fill a skilled position.
- you offer a skilled position that is full-time and ongoing for at least two years from the date of visa grant, with no express exclusion included in the employment contract of this period being extended in future.
- you meet the and have the capacity to pay the worker at least the annual market salary rate for two years.
For information about the Skilling Australians Fund (SAF) levy requirement, see Employer Sponsored Skilled visas – Skilling Australians Fund (SAF) levy.
Advice where a visa holder has worked for a different employer
Advice regarding situations where the skilled worker has worked for different entities during the three year period is explained below.
Time already worked on a 482 or 457 visa can only be counted towards the three year requirement of the Temporary Residence Transition stream where it can be demonstrated that the nominated person has been working in the same role, with the same employer, and in the same location for a full three year period.
As a result, if, during the three years before nominating, the 482 or 457 visa holder worked for an associated entity rather than directly for their sponsor, more steps will be required to nominate this worker under the Temporary Residence Transition stream as outlined below:
- if the original standard business sponsor again wishes to sponsor the worker but now for permanent residence, evidence must be provided that the skilled worker has been working in the same role, with the same employer and in the same location, for the entire three years they held their subclass 457 or 482 visa.
- if the associated entity wishes to sponsor the worker directly, they must first become an approved standard business sponsor and then also provide above evidence.
Alternatively, if you have lodged a new standard business sponsorship at any time during the three year period (for example because your business underwent a takeover or restructure), you need to provide evidence that the previous standard business sponsor and yourself (as the current standard business sponsor) might be considered the same employer of the 482 or 457 visa holder.
Employer Nomination Direct Entry stream nominations
You may be able to nominate a skilled worker for this visa under this stream if you:
Employer nominations made for positions that are subject to a labour agreement should be made under the Agreement stream of ENS. Employer nominations under the Agreement stream may be considered only if the positions are subject to a labour agreement. The criteria for 186 nominations under the Agreement stream will be set out in the labour agreement negotiated at the time of labour agreement approval.
There may be limited circumstances in which a 457 or 482 nomination that was otherwise subject to a labour agreement is made under the Direct Entry stream of ENS. This may occur in circumstances where the labour agreement does not provide a pathway to permanent residence, and the visa applicant is able to meet the requirements of the Direct Entry stream in their own right. In these circumstances, the employer nomination is required to meet all requirements of the Direct Entry stream. Any concessions provided for in the labour agreement do not apply.
