Strategy Relaxes Labour Market Test For Overseas Workers

The Government’s new Migration Strategy contains significant wins for employers, including relaxation of the Labour Market Test and a new Skills in Demand visa that trucks drivers may include truck drivers

In a big win for employers, the Federal Government’s new Migration Strategy has relaxed the Labour Market Test (LMT) requirements businesses need to meet before accessing the skilled migration scheme.

Released December 11, the new LMT policy removes the need for employers to advertise jobs on the Workforce Australia website. This change applies to subclass 482 (short-term and medium-term streams) and 494 (employer-sponsored stream) applications and will allow employers greater flexibility in relation to how they undertake LMT.

The changes mean employers must now conduct two valid advertisements, instead of three, for on-hand nominations and nominations lodged on or after December 11, 2023, either on a “prominent or professional recruitment website with national reach”, in national print media, on national radio, or the business’ website if the employer is an accredited sponsor.

At the same time the Government has increased the validity period for LMT from four to six months.

Employers will still need to provide a copy of the advertising material used to advertise the position (and that meet the advertising requirements), and for most nominations, the position must have been advertised for at least four weeks within the four-month period immediately prior to lodging the nomination application.

HVIA Chief Executive Officer Todd Hacking says the relaxation of the LMT rules – which the organisation called for prior to the last Federal Election – is a “big win” for industry and employers.

However, he adds that the LMT still remains too rigid for the current circumstances in which businesses continue to confront significant skilled labour shortages.

Though in a pointer to further possible reforms, the Strategy says the Government will “consider moving away from employer-conducted labour market testing towards mechanisms for robust and genuine independent verification of labour market need” as Jobs and Skills Australia’s role in identifying skills needs using an evidence-based approach “further matures”.

“The LMT requirements often adds three-plus months onto the application. Most businesses who are going down this route are doing it as a last resort and should just have to prove you’ve made a genuine attempt,” Hacking argues.

“Given the current circumstances, a temporary relaxation of these rules would help immensely.”

Among other significant changes outlined in the Strategy is the introduction of a new four-year temporary skilled worker visa—the Skills in Demand visa.

This new visa will give workers more opportunity to move employers and will provide clear pathways to permanent residence, with periods of employment with any approved employer counting towards permanent residence requirements.

The Skills in Demand visa will replace the complex single employer-sponsored Temporary Skill Shortage visa, which business and unions agreed was not fit for purpose.

Hacking says this is a welcome improvement on the previous policy which severely restricted mobility.

“Previously the visas were too restrictive and locked a person into a location. The employer should be able to move the employee based on employment requirements,” he says.

Additionally, the Government will create three targeted pathways within the Skills in Demand visa, the first being the Specialist Skills Pathway focused on migrants who are critical to Australia’s sovereign capabilities and have potential to grow the skills and expertise of the Australian workforce (for example, engineering managers who develop electrolysers to help with the transition to a net zero economy and cyber specialists who assist banks to respond to cyber-attacks).

The second pathway is the Core Skills Pathway, which is designed to bring in the skilled employees Australia needs now and into the future to provide the goods and services needed to support “our way of life”. These include, for example, registered nurses and secondary school teachers.

Unlike the Specialist Skills Pathway, trades workers, machinery operators and drivers, and labourers will be eligible under the Core Skills Pathway subject to being identified on a new Core Skills Occupation List based on advice from Jobs and Skills Australia and being paid above the Temporary Skilled Migration Income Threshold, which has increased from $53,900 to $70,000 (including for roles paid above the Specialist Skills Threshold).

The Government will establish a median service standard of 21 days for the new Skills in Demand visa and seven days for the Specialist Skills Pathway.

Hacking says the Core Skills Pathway has the potential to be of huge benefit to transport operators facing severe driver shortages.

“Currently, truck drivers are not classed as skilled labour, making it difficult to recruit overseas workers. This could be a massive win for the industry if confirmed,” he says.

The third pathway the Government says it is considering is the Essential Skills Pathway, which will be a more regulated pathway for lower-paid workers with essential skills – with a particular emphasis on the care and support economy.