What’s all this fuss about Labour Market Testing and 457 visas?

by External25 Nov 2013
Labour Market Testing is now in effect, applying to all subclass 457 visa nominations lodged since 23 November 2013. Ariel Brott outlines what it means for business.

If you have been in HR for long enough, you will recall that once upon a time our government considered Labour Market Testing (LMT) a good idea when sponsoring foreign workers. Then some 10 years ago, it was decided that maybe LMT was not such a good idea, and it was promptly abolished. More recently, LMT has been rediscovered as a long lost good idea after all…


I previously discussed LMT in 457 Visas Go Under the Knife and Proposed Changes to 457 Visas. LMT is now in effect, applying to all subclass 457 visa nominations lodged since 23 November 2013.

What is LMT?
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.

Which occupations does LMT apply to?
LMT does not apply to all occupations under all circumstances. Most management, professional and associate professional occupations are exempt. However, LMT does in general apply to the following:
  • trade occupations
  • technical occupations
  • engineers
  • nurses
  • any occupation where the sponsor has retrenched, or made redundant, Australian staff in the four months prior to lodging a nomination application in the same or a similar occupation
What must employers do?
In the event of nominating a candidate subject to LMT, you need to provide evidence to show you have tested the labour market. In general, this means advertising the position and then providing details of that advertising and its outcomes, such as the number of applicants, number of people recruited, and why no other candidates were suitable.

Advertising may be conducted through the media, recruiters, company websites and even social media such as Facebook.

When must employers conduct LMT?
LMT must be conducted at any stage in the 12 months prior to lodging the nomination. However, where staff have been retrenched or made redundant in the 4 months prior to lodging the nomination, LMT must be conducted after the redundancies or retrenchments have occurred, prior to nominating a candidate in the same or a similar occupation.

Are there any exemptions from LMT for affected occupations?
There are two main exemptions for affected occupations:
  • where the Minister declares exemptions in the event of a major disaster, in order to allow overseas disaster relief and recovery workers to enter Australia unimpeded
  • where LMT conflicts with Australia’s international trade obligations, for example if:
  • the worker is a citizen of Chile or Thailand or is a citizen or permanent resident of New Zealand
  • the worker is currently employed by an associated entity of your business, and that business is located in an ASEAN country, Chile or New Zealand
  • the worker is a citizen of a World Trade Organisation (WTO) member country and has worked for you in Australia on a full-time basis for the two years prior to lodging the nomination
  • your business operates in a WTO country and you are seeking to nominate the worker for a senior management position (note, most senior management occupations will already be exempt)
Implications for your business
While the impact of LMT is limited to certain occupations in certain circumstances, it is important to be aware of which factors affect whether or not LMT applies, and when.
HR professionals should establish systems, or adapt existing ones, to deal with LMT, for example to:
  • record and cross-reference records of redundancies and retrenchments, to establish whether LMT may be applicable to positions that would otherwise be exempt
  • record and cross-reference details and outcomes of recruitment efforts, including for candidates who are not successful
As always, where complex assessments are involved such as the impact of international trade obligations, it would be wise to consult your immigration lawyers.

About the author

Ariel Brott is a solicitor and migration agent in the corporate division of Australia’s leading migration firm Erskine Rodan & Associates.

If you have any migration-related queries, Erskine Rodan & Associates, in conjunction with Human Capital Online, is now offering a FREE consultation worth $387, to all subscribers across Australia, for matters relating to the recruitment of foreign personnel. Whether you need a new immigration adviser, or just a second opinion, we invite you to discuss your concerns with Australia’s most celebrated specialist immigration law firm. To get your free consultation, email: ariel.brott@erskinerodan.com.au


  • by Mon 11/02/2014 11:25:59 PM

    going around that testing will be very easy.

    Create a add for a position that cannot be found in a person. Then inform the government that we are not able to find that human and get a person on 457 visa.

    No one will know if this new comer meets all the skills listed on the add as no one will examin him.

    A mechanical engineer can work as an engineer, an HR, a project Manager, a Director etc.

    How will the immigration minister know what are they getting, they can get Boats of loads of 457 holders while he will be still looking for the boat smugllers.

    It needs to be scrapped and train the locals. The situation of employment is so bad too much competition and always the locals are beyond the required skills.

  • by Claire Armfield 5/05/2016 11:40:42 AM

    I know of 457 visa holders being employed in nursing jobs that are considered entry level jobs like in rehab. wards and aged care yet the locals are overlooked for these jobs. This will eventually bite the companies in the backside when these 457 visa holders realise that they can apply to Fair Work Australia to get their backpay because they have been underpaid (I know this for a fact that many are getting underpaid). If Labour one days chooses to change the law and ensure that unions can go in and compare pays too, the companies will find out that they will be in some financial strife too. Also in the meantime the companies reputations are being tarnished by substandard care, while many Australian nurses walk away and Australia becomes a laughing stock to foreigners, as Australians end up with huge HECS debts and no work. The govt is kowtowing too much to businesses rather than looking at really if they need 457 visa holders and looking to see if the boards have given themselves pay increases, which in effect means that if they have the company isn't actually struggling at all. Australians are getting fed up with foreigners taking jobs away from us and they won't stand by incompetent parties. Just talk to individuals rather than reading the media to find out the truth of the matter.