There was an article this week in The Australian Financial Review (by Julie Hare – July 26th) focusing on the Subclass 408 “COVID” Visa but we have also been talking about this visa for a while now.

408 COVID visa – Understand what is happening

At the core of this issue is the substantial increase in the number of international students choosing to apply for a 408 COVID visa instead of continuing their studies and extending their Student Visas in Australia.

As of May, there were 105,300 people holding 408 COVID visas, 18,000 of which are from India, followed by Nepal, China, the Philippines, Colombia, and Brazil.

The 408 COVID visa emerged during the peak of the COVID-19 pandemic as a lifeline for individuals on expiring temporary visas. The visa stream was created to allow these individuals to stay legally in Australia at a time when many couldn’t find a flight out of the country and risked breaking migration law if they overstayed their visas. 

Soon after, the government used this visa to grant work rights to individuals who had ongoing employment or a job offer in critical sectors. At first, those critical sectors were considered to be health and aged care, then child care was added, and soon hospitality and tourism.

Then the critical sector requirement was waived and anyone with work rights and a job offer could (and still can) apply for this visa, regardless of the sector in which they are proposing to work or keep working. Supposedly, this was contributing to our economy amidst closed borders and heightened uncertainty.

The 408 COVID Visa dilemma

But, Australia’s borders have been open since December 2021 so… what is the point of this visa now? This is a question that education lobbying groups have been asking, and they want to see this visa gone, while at the same time, the business sector wants the visa to remain in place as it helps to increase numbers of workers on the ground.

The visa, initially a crisis response, now appears to be a conduit to low-skilled full-time employment. Of note, the nationalities most commonly seen among 408 COVID visa holders reflect Australia’s main source countries of international students.

The appeal of the 408 visa is undeniably tied to its accessibility – it is free, can be processed online, and is generally approved in a matter of days.

A Skills Recession scenario

While there are concerns about the implications of the 408 COVID visa on the integrity of Australia’s international education sector, recent data from the Hays Recruitment Salary Guide 2023 offers another perspective.

The survey reveals a challenging labour market scenario. A significant 80% of surveyed Australian employers report being impacted by a skills shortage, a situation referred to as a “Skills Recession”. Additionally, surveyed employers say this situation has notably intensified over the past 12 months.

Given this backdrop, employers are increasingly exploring different avenues to bridge this skills gap. Approximately 37% of surveyed employers are considering the option of hiring an overseas employee and/or sponsoring them. Another 34% are open to the idea.

From this standpoint, the 408 COVID visa may be seen as a useful tool to address the prevailing skills shortage. But what is clear here too, is that if the majority of the 100K plus 408 COVID visa holders are in low-skilled positions, we need a visa subclass for low skilled workers across the board.

At the same time, it is crucial to recognize the potential risks associated with the 408 visa. Given its accessibility, there is potential for misuse and exploitation. There is a lack of checks and robust criteria in place when compared to established visa subclasses like the Sponsorship Visa 482 TSS or Training Visa Subclass 407.

These visa options are legitimate choices for employers who prioritise compliance with immigration and employment laws, and also aim to foster long-term relationships with their teams by taking care of them. 

Our point of view

We normally advise our employer clients to stay away from the 408 COVID visa but we also believe students are doing themselves a disservice when they choose this visa: when they apply for a sponsorship or training visa, they are opening possibilities for themselves to move to permanent visas with benefits.

And every day spent on a 408 visa in this case, is a wasted day.

This is especially the case now that the government has announced it will create pathways for all occupations under the 482 TSS Sponsorship Visa to be eligible for a permanent Employer Visa (subject to all other requirements of the visa subclass obviously) after 2 years of holding a 482 TSS visa. Time spent working on a 408 visa will not count towards these 2 years…

Although we offer assistance to prepare and lodge 408 COVID visa applications, when students seek our advice in relation to the 408 COVID visa, we explain all the above to them, but in the end, the choice is theirs.

The 408 COVID Visa is at the confluence of international education, visa policies, and labour market demand. There has been talk for a few months now that the visa will soon be shut down, and the AFR article mentions that too. When changes are implemented, we will be here to let you know.

My team at Bravo Migration and I remain committed to fostering understanding, sharing timely updates, and facilitating informed discussions.

The post Australia’s Skills Recession Dilemma and the 408 COVID Visa appeared first on BRAVO.