As a legally operating business and approved sponsor in Australia, you can use the labour market testing (LMT) pathway to fill positions that your local labour market is not able to. Here is an in-depth guide to understanding what labour market testing is in Australia and the obligations you must fulfil.
What Is Labour Market Testing (LMT)?
Labour market testing is a mandatory process required by the Department of Home Affairs. It demonstrates that a standard business sponsor has made genuine efforts to recruit suitably qualified and experienced Australian citizens or permanent residents prior to nominating an overseas worker for a vacancy.
LMT ensures that Australian citizens and permanent residents are given priority consideration for employment opportunities before businesses nominate overseas workers.
As per the DHA, LMT is a mandatory requirement for the following visas:
When Do Employers Need to Undertake Labour Market Testing?
Employers are required to undertake LMT prior to nominating an overseas worker if the position cannot be filled through the local labour market. This applies whether the role is newly created, replaces an existing employee, or is otherwise critical to business operations.
What Must Be Included in an LMT Job Advertisement?
LMT job advertisements must comply with strict Department of Home Affairs requirements. The following elements must be included:
Mandatory Information in the Ads
- The title or a detailed description of the position (multiple roles may be included in a single advertisement)
- The required skills and experience for the position
- The accredited sponsor's name, or the name of the recruitment agency they are using
- The salary, if the annual earnings are below $96,400 (mentioning the salary range is allowed)
Advertising Duration Requirements
- The advertisement must be posted four months immediately before lodging your nomination application.
- The advertisement must run for at least four weeks within the four-month duration.
Where the Ads Must Be Posted
- Industry-specific recruitment websites relevant to the nominated occupation
- A general classifieds website
- LinkedIn's online recruitment platform (job vacancies restricted to LinkedIn profile members will not count under LMT requirements)
- National print media (magazines or newspapers with national reach and published at least once a month)
- National radio channels with national reach
- On your business website, if you are an approved sponsor
- An advertisement solely through social media posts (such as Twitter and Instagram) isn't allowed.
Labour Market Testing Requirements
Following the labour market testing requirements as laid out by the DHA is critical. Here are the requirements to adhere to:
- Employers must start their LMT four months before lodging their subclass 482 or 494 nomination.
- Employers must publish at least two advertisements.
LMT Advertising Requirements Overview
Requirement | Details |
Number of ads | Minimum of 2-3 ads |
Additional platforms | Any 2 nationally recognised job boards |
Minimum duration | 28 calendar days |
Required inclusions | Salary, job title, employer name, skills required |
Validity period | Ads must be posted within 4 months of nomination |
Evidence | Screenshots, ad copies, invoices |
What Evidence Is Needed to Prove LMT?
Employers must retain and provide evidence of all advertisements published to satisfy the Department’s criteria. Evidence may include:
Acceptable Forms of Evidence
- Job advertisements on at least two professional recruitment platforms or job boards with national reach
- Screenshots of the jobs posted
- Advertisement copies clearly stating the required job details, including employer name, position titles, required skills, and salary range
Common Mistakes to Avoid
- Failure to post advertisements on eligible platforms or for the minimum required duration
- Not posting advertisements within the required four-month period
- Advertisements missing key details, especially the salary range if it is below the required threshold
- Posting advertisements through social media
- Not verifying whether exemptions or alternative arrangements apply
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When Is Labour Market Testing Not Required?
There are limited circumstances where LMT is not required for a nominated occupation:
Specified LMT Exemptions
- While occupation-based exemptions for LMT were previously available for subclass 457 (temporary skilled visa), they are not available anymore.
- There are no occupation-based exemptions for circumstances like specific occupations, skill levels of occupations, or for recovery work after a major disaster.
International Trade Obligations (ITOs)
- LMT is not required where an exemption applies under Australia’s international trade obligations (ITOs).
Understanding International Trade Obligations (ITOs)
The international trade obligations refer to specific responsibilities under the World Trade Organisation (WTO), the General Agreement on Trade in Services (GATS), or Fair Trade Agreements in Services. When you nominate a worker from certain countries or positions falling under an ITO, LMT requirements will not apply.
Countries Covered Under ITOs
- China
- Brunei
- Japan
- Malaysia
- Peru
- Mexico
- Vietnam
- Thailand
- Chile
- Canada
- South Korea
- Singapore
- New Zealand
- The United Kingdom
- Samoa
- Peru
- Kiribati
- Tuvalu
- Solomon Islands
- Tonga
- Niue
- Vanuatu
- The Cook Islands
- ASEAN (Association of South-East Asian Nations) countries: Brunei, Cambodia, Myanmar, Indonesia, Malaysia, Laos, Singapore, Thailand, the Philippines, and Vietnam
Scenarios Where ITOs Apply
- The nominated worker is a national, citizen, or permanent resident of an exempt country and falls within an exempted ITO category.
- The nominated worker is a current employee of an associated entity of your business, and the entity is in any of the exempted countries.
- The nominated worker is a current employee of an associated entity of your business, and the entity operates in a WTO member country, and the nominated position is a senior manager or executive occupation for ITO purposes.
- Your business operates in a WTO member territory or country, or the Cook Islands, Niue, Kiribati, or Tuvalu, and you wish to set up a business in Australia, and the nominated occupation is for a Senior Manager or Executive.
- The nominated worker is an eligible permanent resident or citizen of a WTO member country or territory and has been employed under you in the nominated Australian position full-time for the last two years.
- Senior managers employed by companies in a WTO country who are part of intra-company transfers and handle at least a substantial part of the operations and establish new operations for their business in Australia.
- Senior Managers for intra-corporate transfer arrangements from Brunei, Myanmar, Malaysia, Singapore, the Philippines, Vietnam, Thailand, Indonesia, Laos, and Cambodia.
What Is a Senior Management Position Under LMT?
For ITO purposes, the following positions are considered senior managers or executives:
- Chief Information Officer
- Advertising Manager
- Chief Executive or Managing Director
- Corporate General Manager
- Finance Manager
- Corporate Services Manager
- Human Resource Manager
- Supply and Distribution Manager
- Sales and Marketing Manager
What Is an Associated Entity for LMT Purposes?
An associated entity is defined in Section 50AAA of the Corporations Act 2001 (Cth) and generally refers to businesses or companies that are connected for the purposes of conducting business. Associated entities include:
- One entity controlling another
- Operations and resources of a business are relevant to each other
- Related corporate bodies of each other
- One business owns the assets or investments of another.
Do You Need Assistance With LMT or Visa Sponsorship?
Australian Migration Lawyers has significant experience in employee sponsorship and LMT compliance. For guidance on LMT processes and sponsoring workers, we can help. Book a consultation to speak with one of our lawyers and discuss your circumstances so you can get strategic guidance on how to proceed.
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Book a Consultation
If you are interested in getting more information about a visa, get in touch with Australian Migration Lawyers for a consultation.
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Frequently Asked Questions
What Is Labour Market Testing?
Labour market testing is a Department of Home Affairs requirement for business sponsors to demonstrate genuine attempts to fill vacancies with Australian citizens or permanent residents prior to nominating an overseas worker.
How Long Must LMT Job Ads Run?
LMT job ads must run for at least 28 days.
Where Do LMT Job Ads Need to Be Posted?
LMT job ads must be posted on eligible platforms with national reach, which include industry-specific recruitment websites, LinkedIn, national print media and radio channels, approved business sponsor websites, and job boards.
What Evidence Must Employers Provide for LMT?
Employers must provide copies of their job ads and screenshots and show ads posted on at least two professional recruitment platforms.
Are There Exemptions From Labour Market Testing?
Yes, ITO-specific exemptions apply for LMT.
Do All Employer-Sponsored Visas Require LMT?
LMT is only required for the subclass 482 and 494 visas.
What Happens If My LMT Evidence Is Incorrect or Incomplete?
If LMT evidence is insufficient or does not meet requirements, the Department may refuse or delay processing the nomination.
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