Sponsoring a worker: labour market testing, sponsor duties and the benefit ban

What labour market testing has to show

The Act defines labour market testing as “testing of the Australian labour market to demonstrate whether a suitably qualified and experienced Australian citizen or Australian permanent resident is readily available to fill the position”. The condition in s 140GBA(3) is met when the Minister is satisfied the testing was done in the set period and manner, the nomination comes with evidence of it, and, having regard to that evidence, a suitably qualified and experienced Australian citizen or permanent resident, and a suitably qualified and experienced eligible temporary visa holder, are each “not readily available to fill the nominated position”. Section 140GBA applies only to a nomination by a person who “is, or has applied to be, in a class of approved work sponsors” the regulations prescribe, and only where requiring the testing would not be inconsistent with an international trade obligation the Minister has determined (s 140GBA(1) and (2)); ss 140GBB and 140GBC set out a major disaster exemption and skill and occupational exemptions.

Redundancies change the timing. If Australian citizens or permanent residents were made redundant or retrenched from positions in the nominated occupation in the sponsor’s business, or an associated entity, in the previous 4 months, the nomination must say so, and the testing “must be undertaken after those redundancies and retrenchments”. The Act also says any advertising duration the Minister sets “must be at least 4 weeks”.

The advertising rules, step by step

LIN 18/036 sets the detail. The version read here is Compilation No. 5, of 7 December 2024; its dollar figures are as that compilation states them.

1. Inside the window

   The testing period is “the period of 4 months ending on the day on which the nomination form in relation to the nominated application is lodged” (s 6(1)).

2. In English

   Any advertising of the position, paid or unpaid, that the sponsor commissions or authorises is in English (s 8(2)).

3. At least two advertisements

   On or in one or more of: a recruitment website with national reach in Australia; print media with national reach; radio with national reach; or, if the sponsor is an accredited sponsor, the sponsor’s own website (s 8(3)). Each must be commissioned or authorised by the sponsor (s 8(3A)).

4. Four details in each advertisement

   The title or a description of the position; the skills or experience it requires; the name of the sponsor or, “if the approved sponsor has engaged a recruitment agency for the purposes of the labour market testing, the name of the recruitment agency”; and the salary, if the intended annual earnings are lower than $96,400.00 (s 8(4)).

5. Open for 4 weeks

   Applications or expressions of interest must be accepted “for at least 4 weeks” from first publication (s 8(5)). The 4 weeks may run across overlapping advertisements, counting any overlapping day once (s 8(6) and (7)).

6. Evidence with the nomination

   A copy of the advertising material used goes with the nomination (s 9(3)).

A “select position” skips the period and advertising rules (ss 6(2) and 7(2)); the nominator gives a written submission on why no suitable Australian or eligible temporary visa holder is readily available instead (s 9(2)). Select positions include, among others, one whose annual earnings will be $250,000.00 or more. The full list is in s 4 of the instrument, linked below.

The sponsor’s obligations

“A person who is or was an approved sponsor must satisfy the sponsorship obligations prescribed by the regulations” (s 140H(1)). Failing one is a civil penalty contravention: 240 penalty units for an approved work sponsor, 60 in any other case (s 140Q). At $364 a unit from 1 July 2026, 240 units is $87,360. An approved work sponsor may instead pay an infringement notice of 48 penalty units as a natural person, or 240 as a body corporate (reg 5.20A(2)).

The obligations sit in Division 2.19 of the Migration Regulations, and each regulation says whom it applies to. Among them: cooperating with inspectors (reg 2.78), keeping records, though for no more than 5 years (reg 2.82), telling Immigration when certain events occur, within the time each item sets (reg 2.84), and ensuring the sponsored person does the activity the visa was granted for (reg 2.86A). Two speak to recruitment directly:

• Recruitment costs stay with the sponsor. Regulation 2.87 bars a current or former approved work sponsor from taking any action that would transfer to another person, or have another person pay it, costs including those “that relate specifically to the recruitment of a non-citizen for the purposes of a nomination”.
• No discriminatory recruitment. A standard business sponsor lawfully operating a business in Australia “must not engage in, or have engaged in, discriminatory recruitment practices during the period of the person’s approval as a work sponsor” (reg 2.87C).

The ban on paying for sponsorship

Section 245AR applies to any person, not only sponsors. A person contravenes it by asking for, or receiving, a benefit from another person “in return for the occurrence of a sponsorship-related event”, and does so “even if the sponsorship-related event does not occur”. It is an offence carrying imprisonment for 2 years or 360 penalty units, or both, and a civil penalty of 240 penalty units. Section 245AS is the other side: offering to provide, or providing, such a benefit, with a civil penalty of 240 penalty units. For a body corporate, a civil penalty order under these sections may be up to 5 times the units stated (s 486R(5)(a)): up to 1,200 penalty units where the section says 240, which is $436,800 at $364 a unit from 1 July 2026.

A “benefit” includes a payment or other valuable consideration, a deduction of an amount, any kind of real or personal property, an advantage, a service and a gift (s 245AQ). Sponsorship-related events are listed in twelve paragraphs, among them making a nomination, employing or engaging a person in the nominated occupation or position, and “the grant of a sponsored visa”.