Are you up to speed with Labour Market Testing?

by Cameron Edmond04 Dec 2013
To little fanfare, Labour Market Testing (LMT) was introduced into the 457 visa program on 23 November. While it slipped under the media radar, the move has generated a lot of interest amongst employers over how it applies to their organisation.

“When nominating workers for subclass 457 visas, you may be required to provide evidence of having tested the local labour market to ensure that there is no suitably qualified and experienced Australian citizen or permanent resident (or certain working holiday visa holders in the agricultural sector) readily available to fill that position,” explained Ariel Brott, solicitor and migration agent at Erskine Rodan & Associates, in a piece for HC.

However, LMT is not always a compulsory measure. In general, most white collar positions are exempt, with LMT primarily applying to trade, technical, engineering and nursing occupations.

A report from Fragomen stated that LMT will often apply if the sponsor has conducted a retrenchment or redundancy in the last four months.

In addition, LMT will also apply if transferring a 457 visa holder from another sponsor in the same way they would an initial nomination. While international trade exemptions apply, Fragomen stressed that organisations must be aware that intra-corporate transfer or senior executive exemptions will only apply in situations where the applicant is overseas and relocating to Australia for work, as opposed to already being there.

“Accordingly, LMT is likely to be required in the case of 457 transfers in non-exempt occupations unless the employee you are transferring from another sponsor is a national of Thailand, Chile or New Zealand,” Fragomen explained.

Key HR takeaways
Of great importance is an understanding of how a position must be tested. Essentially, it must be advertised through a range of methods to thoroughly test the labour market. These methods include:
  • Posting the job on internal job boards.
  • Engaging in-house recruiters, external recruiters or head-hunters.
  • Posting the job on social media and professional networking sites.
  • Participation in recruitment events (trade shows, expos, etc).
There are no specifications regarding which media specifically is used, how long the advertisement must be posted, or its contents, although the criteria must be non-discriminatory.

In order to ensure the case officer analysing the nomination is satisfied there are no suitable Australians to fill the role, employers must provide the following information:
  • The mode of advertising used.
  • When it occurred.
  • Which geographical area the advertising was conducted in.
  • The fees incurred through conducting the advertising.

Additionally, employers can choose to provide information regarding the number of applications received, the number recruited, and the reasons why Australian candidates were not successful, but this is not compulsory.


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