Month: November 2013

Labour Market Testing and the Subclass 457 Visa

As of 23 November 2013, labour market testing provisions have been introduced into the Temporary Work Skilled (subclass 457) visa program.   The changes were established as part of the Migration Amendment (Temporary Sponsored Visas) Act 2013 which was passed by the Australian Federal Government in June 2013.  The purpose of the labour market testing provisions is for sponsoring businesses to demonstrate that they have made a genuine effort to recruit from the Australian population, prior to seeking to recruit overseas workers.

Employers will need to establish that reasonable efforts were made to find suitably qualified and experienced Australian workers for nominated positions in the twelve months prior to lodging a nomination application.  Employers must submit evidence to the Department of Immigration and Border Protection (DIBP) of efforts to recruit locally, unless the nominated occupation selected is exempt.

The labour market testing provisions

Proving that reasonable efforts were made to hire suitably qualified and experienced Australian workers, must include the following steps:

  • Employers must have advertised the position locally and must provide information concerning all efforts by the business at advertising and recruiting for the position locally in the 12 months prior to lodging the nomination application;
  • Evidence of advertising and recruitment efforts must include the following information:
    • the dates recruitment activities occurred;
    • the geographic target audience; and
    • the outcome of the recruitment, including the number of applications received, number of applicants hired and the general reasons why other candidates were not selected;
  • Evidence of labour market testing may also include:
    • labour market research;
    • expressions of support from government employment agencies; or
    • information about the sponsoring business’ participation in job and career expositions;
  • Employers must show that there were no suitable Australian permanent resident or citizen candidates able to fill the position.

If redundancies or retrenchments have been made by the sponsoring business or an associated entity of Australian workers in the same or a similar occupation to the nominated occupation within four months of lodging the nomination application, then the business must provide evidence of recruitment evidence from the date that the redundancies or retrenchments were made.

Occupations affected by labour testing and those that will be exempt

The DIBP has confirmed the list of occupations under the subclass 457 visa regime that will be subject to labour market testing.

Labour market testing will only be required for the following types of occupations:

  • Trade occupations (ie requiring an apprenticeship or completion of the equivalent of an Australian Certificate IV);
  • Technical occupations (ie requiring a Certificate IV);
  • Engineers; and
  • Nurses.

Basically, any other eligible occupation for the subclass 457 visa will be exempt.  The general criteria of the exempt occupations are that they require a diploma, bachelor degree or higher qualification or equivalent experience.

Labour Market Testing will NOT be required for:

  • Most Management Positions;
  • Most Professional Occupations; and
  • Most Associate Professional Positions (requiring a diploma level qualification).

Exemptions will also apply where labour market testing requirements would be inconsistent with international trade obligations.  International trade obligations include the following situations:

  1. The nominated worker is a citizen of Chile or Thailand, or is a Citizen/Permanent Resident of New Zealand;
  2. The nominated worker is a current employee of a business that is an associated entity of the sponsor that is located in an Association of South-East Asian Nations (ASEAN) country (Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam), Chile or New Zealand.
  3. The nominated worker is a current employee of an associated entity of the sponsor who operates in a country that is a member of the World Trade Organisation, where the nominated occupation is listed below as an “Executive or Senior Manager” and the nominee will be responsible for the entire or a substantial part of your company’s operations in Australia.
  4. The sponsor currently operates in a World Trade Organisation member country and is seeking to establish a business in Australia, where the nominated occupation is listed as an “Executive or Senior Manager”;
  5. The nominated worker is a citizen of a World Trade Organisation member country and has worked for the sponsor in Australia on a full-time basis for the last two years.

Moreover, subclass 457 visa applicants nominated to assist in a relief effort after a major disaster will also be exempt from labour market testing.

Labour market testing provisions will not apply to nominations lodged by parties to a labour agreement.

The effect of the labour market testing provisions

The impact of labour market testing will be limited to specific occupations, such as engineering, nursing and some trade and technical occupations.

When sponsoring businesses wish to nominate workers who do not fall within one of the exemptions from labour market testing, additional steps will be required to demonstrate attempts at hiring within the local labour force.

Please contact us for further information regarding the new labour market testing provisions.


The information on this website is intended only to provide a summary and general overview on relevant matters. It is not intended to be comprehensive nor does it constitute legal advice. You are advised to seek legal or other professional advice before acting or relying on any of the content contained in this website.