457 Visa Program – Labour market testing


From 23 November 2013, employers seeking to access the 457 visa program need to undertake labour market testing in relation to certain skilled positions.

According to the government, these new measures are aimed at ensuring that the 457 visa program is only used to meet genuine skill shortages, by requiring sponsoring businesses to make genuine efforts to provide employment opportunities to Australians.

What is labour market testing?

The new provisions refer to efforts made by a sponsor to test the Australian labour market to ensure that there is no suitably qualified and experienced Australian citizen or permanent resident or ‘eligible temporary visa holder’ available to fill that position.

Efforts to recruit locally for the nominated position (or similar positions) will need to have taken place within the 12 months before lodging the nomination, and should be provided at the time of lodgement.

When are employers required to undertake labour market testing?

Sponsoring employers are required to undertake labour market testing unless the position is “exempt”. The exemptions are currently broad enough to cover the majority of occupations eligible for sponsorship under the 457 program.

A sponsor will be exempt from undertaking labour market testing if:

  • It would be inconsistent with Australia’s international trade obligations. This includes workers nominated from certain countries (including ASEAN nations), certain intra-company transfers, and some executives and senior managers;
  • The position relates to relief or recovery for a major disaster; or
  • The nominated position relates to an occupation with “Skill Level 1” or “Skill Level 2” within the Australian New Zealand Standard Classification of Occupations (AZNSCO). Practically, this covers most managerial or professional occupations, except engineering and nursing occupations which are “protected” occupations according to the legislation.

The effect of these exemptions is that most trade and technical occupations, as well as the “protected” engineering and nursing occupations, will require labour market testing. For a full list of occupations that will require labour market testing click here.

What do sponsors need to do?

Where necessary, evidence of labour market testing must be provided at the time of lodging the nomination. Sponsors can provide the following:

  • details of paid or unpaid advertising (this includes advertising on the sponsor’s own website or social media), or other recruitment efforts (including the use of external recruitment agencies), that have been conducted by the business within the 12 months before lodging the nomination;
  • results of the advertising or other recruitment methods produced; and
  • if responses were received, a statement outlining why any candidates were unsuitable for the position, or were unwilling to take up the position.

Detailed records of job interviews or copies of job applications are not required.

Evidence of labour market testing will also be required where, in the four months before lodging the nomination, redundancies or retrenchments have occurred in the same occupation as the nominated position.


Affected sponsors should be mindful of the new requirements, and retain evidence of job advertisements or recruitment activities as this can continue to be relied upon for a period of 12 months.

The exemptions to the new provisions are broad enough to cover most occupations on the Consolidate Sponsored Occupations List (CSOL) that are eligible for nomination under the 457 program. Therefore, many businesses may presently be unaffected by the new requirements.

All sponsors should be aware that the new provisions have been enshrined in legislation, so they could be expanded or amended at a later date. The government may choose to limit the exemptions (which are currently very broad) in future.


Mark Dunphy

Mark is an employment lawyer experienced in litigious and non-litigious applications of employment and industrial relations law.

Kristopher Kunasingam

Kristopher leads the firm's migration practice. He specialises in employment-related migration to Australia.

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