Labour market testing is a legal requirement unless the nominated position is exempt. Employers who seek to employ someone on a 457 visa may be required to labour market test.
The intention of labour market testing is to ensure that the nominated positions are genuinely skilled positions that cannot be filled by Australian workers. Through Labour Market Testing you test the local market for the specific position you are trying to fill to try and find a suitable Australian employee. This ensures that an employer has no choice but to recruit an overseas worker to fill the position.
Testing must have occurred within the 12 months prior to lodgement of the nomination. Evidence of the testing will need to be included with the nomination. You must demonstrate that you have made recent and genuine attempts to recruit Australian citizens or permanent residents.
Exemptions may be possible, depending on the skill level of the position you are trying to fill.