As skill shortages persist across Australia in 2025, tapping into overseas talent remains an attractive option to support business productivity and growth. That’s where Labour Agreements come in – a pathway that allows you to secure overseas employees with skills that don’t quite fit into the ‘standard’ visa streams. It’s a comparatively flexible system that helps you to proactively plan your workforce needs for up to five years, ensuring consistent access to essential talent.

Here we’ll cover all you need to know about Labour Agreements; what they are and what you need to do to secure – and keep – them.

What is a Labour Agreement?

A Labour Agreement is a formal negotiated contract between an Australian employer and the Department of Home Affairs (DHA). It’s the option that’s used when standard skilled visa programs don’t meet the genuine need you have, keeping in mind the government’s overarching goal to protect opportunities for job-ready Australians.

Unlike the more rigid standard visa pathways, Labour Agreements offer significant flexibility and benefits. You can get concessions on critical visa criteria, such as adjustments to English language proficiency thresholds, work experience or salary levels, particularly for regional areas. 

Most importantly, Labour Agreements allow you to sponsor workers in occupations not on the standard skilled occupation lists. This is particularly helpful if you’re in a niche or emerging industry. 

Once an agreement is in place, it streamlines the process for sponsoring and employing overseas workers with a stable five-year timeframe. 

These agreements can facilitate various visas, including the:

1. Skills in Demand (SID) visa (subclass 482)
2. Skilled Employer Sponsored Regional (Provisional) visa (subclass 494)
3. Employer Nomination Scheme (subclass 186) visa

Types of Labour Agreements

Australia’s migration framework offers several distinct types of Labour Agreements, each designed to address different scenarios and industry conditions. Understanding these variations is key for identifying the most appropriate pathway for your specific needs and below we have listed some examples.

Type of Agreement	Purpose	Key Components	Industries/Regions
Company Specific Labour Agreements (CSLA)	Addressing unique business needs not covered by existing visa pathways	Fully customised agreementCan include niche occupations & tailored concessions	Any business with a unique and unlisted skill shortage
Industry Labour Agreements (ILA)	Addressing sector-wide, recognised skill shortages within specific industries	Pre-negotiated templatesFixed terms & conditionsSet concessions	AdvertisingAged CareDairyFishingHorticultureMeatMinister of Religion, On-HirePorkRestaurant (premium dining)
Designated Area Migration Agreements (DAMA)	Addressing localised labour gaps Supporting regional development	Region-specific, Tailored concessions Broader range of occupations than standard lists	Adelaide South Australia RegionalFar North QueenslandTownsvilleGoulburn ValleyGreat South CoastNorthern TerritoryWestern AustraliaEast KimberleyOranaPilbaraSouth West WAThe Goldfields WA

As you can see from the table, there are a wide variety of Labour Agreements, ranging from the highly customised to the highly standardised. 

• Generally, CSLAs have the greatest degree of bespoke solutions, but are more complex when it comes to application and ongoing compliance. 

• ILAs offer streamlined processes for recognised industry shortages, but with less room for individual negotiation. 

• DAMAs sit somewhere in the middle with regional flexibility within a broader framework. 

• Project Agreements are similar, with some flexibility for those who need workers for large-scale infrastructure or resource projects for specific construction phases.

Choosing the right labour agreement for your business is imperative; it could be the difference between success in securing the employees you need and rejection. If you’re not sure, engaging with a visa migration specialist can be a smart move. 

The Process

Putting a Labour Agreement into place is a detailed and rigorous process. It involves significant documentation, extensive negotiation with the DHA, and mandatory consultation with industry stakeholders. Here’s an outline:

1. Demonstrating Genuine Need

To increase your chances of a successful Labour Agreement, it’s imperative you demonstrate a genuine labour market need, generally referred to as labour market testing. You need to provide compelling evidence you’ve made extensive efforts to first recruit Australian citizens or permanent residents for your open positions; efforts that haven’t worked. Evidence includes:

1. Details of the specific skills and expertise you can’t find here
2. Outlines of your recruitment activities
3. The anticipated positive impact of hiring overseas talent on your business performance

Other requirements include demonstrating your business has:

1. Been registered and lawfully operating in Australia for at least 12 months
2. Financial viability 
3. No adverse information (i.e. you haven’t broken any laws, been insolvent etc.)

If you’re applying for a Company-Specific Labour Agreement, you’ll also need to consult with relevant stakeholders, such as industry bodies, unions, and other potentially impacted community groups. You must give such groups a full proposal, including occupations, numbers of workers, locations, any sought concessions and proposed salaries, and give them 10 working days to respond. You then include these responses in your application.

You’re also expected to have plans in place to transfer skills to Australian workers, reducing future reliance on overseas workers. In addition, depending on your location, there may be limits on the percentage of overseas workers in the total workforce.

You have numerous other ongoing responsibilities, and these are detailed in the section ‘Approval and Ongoing Compliance’ below. 

2. Lodgement and Assessment

Once your business case with supporting documentation is ready, you lodge the Labour Agreement online via your ImmiAccount. It’s then over to the department to assess it, with processing times highly dependent on how complete your application is, and how responsive you are to requests for further information. 

It’s also important to understand the government is not obligated to enter into a Labour Agreement, and has the final say on the number of positions approved.

There are no fees to apply for a Labour Agreement, but you will have to pay other costs, for example, the Skilling Australians Fund levy and visa application fees. 

3. Approval and Ongoing Compliance

If approved, you’ll get your Labour Agreement document for review and signature. Once signed and returned, the agreement generally lasts for five years and is renewable. You can then move on to the next steps in the process to secure your overseas employees; nominating them through your ImmiAccount, and they then apply for the relevant visa.

It’s also imperative to understand you have numerous compliance obligations for your Labour Agreements. You must adhere to the conditions and obligations outlined in the Labour Agreements, as well as broader migration legislation. This includes sticking to worker limits, maintaining agreed work conditions, and fulfilling ongoing reporting and record-keeping requirements, such as letting the department know of any changes. Failure to do so can result in significant sanctions, including fines, suspension, or even revocation of sponsorship rights.  

It’s good to know that as a part of the compliance process, the DHA may also perform an audit and/or site visits.

Recent Updates 

Australia’s migration landscape is never static and that the last few years have seen some fairly significant changes for those wanting to sponsor overseas workers through a Labour Agreement.

The most notable is the replacement of the Temporary Skill Shortage (TSS) visa with the new Skills in Demand (SID) visa. The changes were made to streamline processes, better address critical skill shortages, as well as provide a clearer pathway to permanent residency. The SID visa features three distinct streams: the Specialist Skills Stream, the Core Skills Stream, and the Labour Agreement Stream. 

A key benefit of the Labour Agreement stream under this visa is its capacity to cover occupations not listed on the standard Core Skills Occupation List (CSOL). It’s a significant and very welcome change for employers who want to sponsor workers in niche, emerging, or highly specialised roles, ones that don’t quite fit into traditional occupation classifications. 

Other key policy changes include:

• Occupation lists

The merging of previous occupation lists (Medium and Long-term Strategic Skills List and Short-term Skilled Occupation List) into a single Occupation Shortage List (OSL), with the Core Skills Occupation List (CSOL) now guiding the Core Skills Stream. 

• Income

From July 1, 2025, the Temporary Skilled Migration Income Threshold (TSMIT) jumps from $73,150 to $76,515. The TSMIT is used in some Labour Agreements, requiring you pay overseas workers at least this salary and the Annual Market Salary Rate (AMSR). Some Labour Agreements, notably DAMAs, can include concessions on the TSMIT.

• Worker mobility

Sponsored visa holders now have up to 180 days at a time (and 365 days total during their visa period) to find a new sponsor, apply for another visa, or depart Australia. While beneficial for workers, this increased mobility means employers sponsoring through Labour Agreements must be even more diligent in maintaining a supportive and compliant workplace to retain their sponsored talent. 

• DAMAs expanded

To support regional development, the government has doubled-down on its commitment to not only expanding DAMAs, but fast-tracking approvals. There are 13 DAMAs in effect across Australia, with a 76% jump in approvals from February 2024 to February 2025. 

Your Key to Successful Labour Agreements 

It’s clear Labour Agreements are a powerful part of Australia’s migration framework for businesses with unique needs, helping them secure the overseas talent they need. But it’s an intricate process, one that can be fraught with frustrating hurdles and delays. Much of this can be circumvented by engaging with a visa migration specialist, like us here at Migration Ways.

We can support your Labour Agreement application in these five key ways:

1. Eligibility assessment

Determining which Labour Agreement is the best for your business needs

2. Building your business case

Helping you prepare a comprehensive application with compelling supporting documentation that effectively demonstrates genuine labour market need and exhaustive local recruitment efforts.

3. Liaison and negotiation

Facilitating communication and negotiation with the Department of Home Affairs, as well as liaising with relevant industry bodies and unions where required.

4. Lodgement 

Ensuring that all documentation is thorough, accurate, and submitted correctly via your ImmiAccount.

5. Ongoing Compliance

Providing guidance on fulfilling ongoing sponsorship obligations, maintaining accurate records, and how to make variations to the agreement.

Please get in touch to find out more about how we can help you secure the talent you require with a successful Labour Agreement application.