Subclass 457 Visa Reform and Labour Market Testing

Publish Date: Oct 10, 2013

The subclass 457 visa continues to be the subject of much debate. Of all the changes to the subclass 457 visa announced by the previous Labor Government, the introduction of Labour Market Testing has perhaps been the most widely discussed. This is particularly so given that the previous iterations of Labour Market Testing under the 457 subclass were used in a somewhat discretionary manner in practice as well as the likely cost implications to employers.

Set to be introduced before the end of the year, the new Labour Market Testing requirements would mean that companies will have to provide proof of their attempts to recruit for a nominated position in the months prior to lodgement of an application. 

This requirement has the potential to impact a number of large sectors including nursing, trades and engineering, where it had been foreshadowed that no occupations will be exempt from Labour Market Testing. Most professional and management occupations would be exempt, but they would be required to be explicitly listed in a legislative instrument as being exempt.

Proposed changes also include compulsory advertising following redundancies being made in the business. This could impact businesses experiencing fluctuations in workload after a period of redundancies. There is also potential for employees who currently hold this visa to be faced with additional conditions should they wish to renew the visa for a further period.

The full impact of any Labour Market Testing regime would only be known several months into its operation. It is not yet in effect. Although comments made by the Coalition before the election seemed to indicate a reversal of many of the changes made by Labor under the Migration Amendment (Temporary Sponsored Visas) Act 2013, it remains unclear what the new Coalition Government intends to announce with respect to the Labour Market Testing changes in the 457 subclass. Until any new policy is formally announced, companies needn’t be overly concerned with trying to anticipate what Labour Market Testing obligations may apply in the future.

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