Labour market testing exists to ensure that the Subclass 457 visa is only used to meet genuine skill shortages, and cannot be used by businesses that do not make genuine efforts to provide employment opportunities to Australians. It provides an assurance that employers only utilise the subclass 457 visa program in circumstances where there are genuine skills shortage in Australia.

When does Labour Market Testing apply?

As of November 2013, employers must demonstrate that they have engaged in Labour market testing in the 12 months leading up to a nominated occupation application. Due to international trade agreements between Australia and a number of other countries, there are categories of entrants and occupations which are exempt from Labour Market Testing. These can be viewed at the departments website http://www.immi.gov.au/visas/pages/457.aspx?tab=4

How does Labour Market Testing operate?

Sponsors are required to demonstrate that they have undertaken labour market testing in relation to the nominated position, prior to nominating the position to be filled by a subclass 457 visa holder. Labour market testing must have been undertaken for the nominated position within the period specified in the legislative instrument.

This provides a balance between giving Australians, Australian permanent residents, and eligible temporary visa holders an opportunity to apply for jobs and ensuring that Australian businesses do not experience undue delays in filling skilled labour shortages that would negatively impact on their businesses.

What evidence do sponsors need to provide as proof of Labour Market Testing?

A nomination must be accompanied by evidence in relation to labour market testing. The types of evidence are set out in the Migration Amendment (Temporary Sponsored Visas) Act 2013. A sponsor must provide information about their attempts to recruit suitably qualified and experienced Australian citizens and permanent residents to the position and any other similar positions.

This information must, in turn, include details of any advertising of the position and any similar positions, commissioned or authorised by the approved sponsor, and fees or expenses for that advertising. Requiring the mandatory provision of such information provides a much stronger test of the sponsor’s efforts to fill vacancies in their business with Australian workers.

What if a sponsor is unable to demonstrate that they have satisfied the LMT requirement?

Sponsors are required to demonstrate that they have undertaken labour market testing in relation to the nominated position within the period specified in the legislative instrument. Therefore, sponsors who are unable to satisfy the labour market testing condition at the time of lodging the nomination will have their nomination refused.

This does not affect their sponsorship status and they will have the opportunity to undertake labour market testing before lodging another nomination for the same position. If a sponsor fails to satisfy the labour market testing requirement, they have the right to seek a merits review of a nomination refusal through the Migration Review Tribunal.

Information adapted from the Department of Immigration and Border Protection website – http://www.immi.gov.au