The labour market test (LMT) is a requirement for employers who want to sponsor foreign workers in Australia. This test also aims to ensure that employers give Australian workers priority over foreign workers. The test involves advertising the job vacancy in Australia for a certain period of time before offering it to a foreign worker.
Embark on a journey to the Land Down Under that is abound with opportunities for skilled and ambitious individuals like yourself. Australia is a nation that is popular for its vibrant economy, diverse culture, and unparalleled natural beauty. This attracts foreign workers who wish to work in Australia and learn more about the labour market test.
Key Takeaways
- The labour market test is a requirement for employers who want to sponsor foreign workers in Australia.
- The test aims to ensure that Australian citizen workers are given priority over foreign workers.
- The test involves advertising the job vacancy in Australia for a certain period of time before offering it to a foreign worker.
- The labour market test is an important aspect of Australia’s immigration law.
Understanding the Essence of LMT
At its core, LMT is a process that aims to safeguard the Australian workforce. It mandates that employers seeking to sponsor overseas workers must first demonstrate their efforts to recruit suitable Australian candidates for the vacant position. This ensures that employers give local talent priority and seek overseas workers only when there is a genuine skills shortage in the local labour market.
How Does the LMT Work?
The labour market test requires employers to advertise the job vacancy in Australia for a certain period of time. The length of time depends on the occupation and the location of the job. For example, if the job is located in a regional area, the employer may need to advertise the job for a longer period of time.
The Australian Government’s job board – jobactive.gov.au – must advertise the vacancy. Furthermore, employers must advertise the vacancy on at least two other industry-specific recruitment websites. Some examples of recruitment websites that publishes advertisements for jobs are Indeed, Jora, Seek, or LinkedIn’s online recruitment platform.
Although LinkedIn’s online recruitment platform is acceptable, job vacancies restricted to LinkedIn profile members only are NOT acceptable. Job advertisements made solely through social media notification (Twitter or Instagram) are not acceptable methods. The advertisement must be in English and must include the following information:
- The title and description of the job
- The skills and experience required for the job
- The annual market salary and benefits offered for the job (Contracts should also include circumstances that may change the market salary rate due to change in earnings or business structure)
- The location of the job
- The name of the employer or professional recruitment agency
The employer must keep a record of the advertisements and the responses received from Australian workers. This may also include job posting on national print media such as newspapers or magazines that are published at least on a monthly basis. If there are no suitable Australian workers who apply for the job, the employer can then offer the job to a foreign worker.
Which Visas Require LMT?
So what visas involve labour market test? These are the Temporary Skill Shortage visa (subclass 482) and the Skilled Employer Sponsored Regional (Provisional) visa (subclass 494). For these visas, LMT involves advertising the position in Australia for at least four weeks within the four months preceding the nomination application.
Labour Market Testing Exemptions
In certain circumstances, the requirement for (LMT) may be waived if international trade obligation applies. These international trade obligations stem from agreements such as the World Trade Organisation (WTO), Fair Trade Agreements, or the General Agreement on Trade in Services. Below are some parties for whom employers may not need to fulfil labour market testing requirements:
- Citizens of WTO member countries who have worked full-time in the nominated position in Australia for at least two years preceding the nomination.
- Citizens or nationals of China, Vietnam, Thailand, Japan, Mexico, or the United Kingdom.
- Citizens or permanent residents of South Korea, Singapore, Chile, Canada, or New Zealand.
- Current employees of an associated entity of the sponsoring business, where the associated entity is located in an ASEAN country. (Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, or Vietnam) or in Canada, Chile, China, Japan, Mexico, South Korea, or New Zealand.
- Senior managers employed by companies in WTO countries who are being transferred within the company (intra-company transfers or ICTs) and are responsible for a substantial part of the company’s operations or the establishment of new operations in Australia.
- Senior managers for ICTs from Malaysia, Philippines, Singapore, Thailand, Vietnam, Indonesia, Cambodia, Laos, Brunei, and Myanmar.
What is the Annual Market Salary Rate?
Overseas workers must be paid no less than the annual market salary rate (AMSR) for an equivalent Australian worker performing the same work in the same location. The AMSR and the actual salary range paid to the overseas worker, excluding non-monetary benefits, must meet or exceed the Temporary Skilled Migration Income Threshold (TSMIT).
Labour Market Test: Understanding the TSMIT
The TSMIT is currently set at AUD53,900 until June 30, 2023, and increasing to AUD70,000 from July 1, 2023. This represents the minimum annual salary for sponsored overseas workers. Non-monetary benefits, such as accommodation or a car, are additional to the TSMIT. The AMSR is determined by considering factors such as:
- Salary of an equivalent Australian worker
- Enterprise agreements or industrial awards
- Job outlook information
- Advertisements for similar positions in the same location
- Remuneration surveys or advice from unions or employer associations
- When an Equivalent Australian Worker Exists
The AMSR is the salary paid to an equivalent Australian worker. If this salary is based on an enterprise agreement or industrial award, provide the agreement/award name and the applicable salary level or occupation group.
What if there are no relevant agreement or award exists, or the Australian worker is paid above the award rate? Then, the worker must provide copies of their employment contract and recent pay slips.
Important note:
- An Australian worker with a different experience or pay grade than the nominee is not considered equivalent.
- Nominations will be refused if the overseas worker is paid less than the equivalent Australian worker or if only generic salary data is provided.
Let Us Help You With Your Work Visa Applications
JB Solicitors can help you with work visa applications and advise employers about labour market test requirements. Whether you are a foreign worker or an Australian employer, we will help you with all the requirements to ensure a smooth employment process. Our immigration lawyers are experts in immigration and employment law matters for all your legal needs.
Contact us today to learn more about the labour market test.
