Australia’s skilled labour shortage is no longer a headline, it is a daily operational reality.
Healthcare providers are short of nurses. Automotive workshops are booked weeks in advance because qualified mechanics are scarce. Mining and infrastructure projects compete for the same pool of engineers and tradespeople. Regional hospitality venues struggle to maintain consistent staffing.
For many employers, skilled migration is not optional. It is essential.
Yet across Australia, sponsors are facing an uncomfortable surprise: nominations are being refused not because the occupation is in shortage, and not because the worker lacks skills but because the Market Salary and Genuine Need requirements are not satisfied.
These two tests have become decisive. And in the current regulatory, they are being applied with increasing precision.
If your business sponsors or plans to sponsor skilled workers, understanding where refusals are occurring is critical.
The Shift: From Shortage to Scrutiny
Australia continues to rely on employer-sponsored visas such as the Subclass 482 (Temporary Skill Shortage) and Subclass 186 (Employer Nomination Scheme). These pathways are designed to address genuine skill gaps in the local labour market.
But while demand for skilled workers remains high, the Department of Home Affairs has sharpened its assessment of employer nominations.
Two questions sit at the centre of that assessment:
- Is the salary truly at market level?
- Is the position genuinely required by the business?
Where the answer to either question is unclear, inconsistent or inadequately supported, refusal is increasingly the outcome.
Market Salary: It is More Than Meeting the Threshold
Many employers believe that if they meet the skilled migration income threshold, the salary requirement is satisfied.
It is not that simple.
In addition to meeting the relevant income threshold, sponsors must demonstrate that the proposed salary reflects the Annual Market Salary Rate (AMSR), the rate that would be paid to an equivalent Australian worker performing the same role, in the same location, with similar experience.
This requirement protects both migrant and Australian workers. It prevents wage undercutting and ensures integrity within the labour market.
What Does “Market Salary” Really Mean?
Market salary is not:
- A guess.
- A convenient figure.
- A number pulled from a generic online source.
It must be supported by objective evidence, such as:
- Payslips or contracts of comparable Australian employees
- Enterprise agreements or relevant awards
- Industry remuneration surveys
- Advertisements for similar roles
- Independent salary benchmarking data
Crucially, the salary must align with the actual duties not merely the occupation title selected.
And this is where many nominations unravel.
Where Market Salary Refusals Are Happening
Inflated Titles, Lower-Level Duties
One common issue involves the nomination of a higher-skilled occupation while the duties reflect a lower-level role.
For example:
- A “Marketing Specialist” role that primarily involves posting on social media and basic administration.
- An “Engineering Technologist” whose duties resemble technical support work.
- A “Retail Manager” in a small shop where the owner makes all strategic decisions.
If the salary corresponds to the lower-level tasks rather than the nominated occupation, the Department may find that the AMSR is not met or that the occupation itself is mischaracterised.
The title cannot do the heavy lifting. The duties must justify it.
Relying Only on Award Rates
Awards are relevant but they are not automatically decisive.
If the broader industry pays significantly above award minimums for comparable roles, relying solely on the award may not establish market rate.
The Department assesses the real market, not just the minimum permissible wage.
Counting Non-Guaranteed Earnings
Bonuses, commissions and overtime can only be counted where they are guaranteed. If a base salary falls below the required level and variable earnings are used to bridge the gap, the nomination may fail.
The guaranteed annual earnings must independently meet both the income threshold and market salary requirements.
Financial Red Flags
When a small business with modest turnover offers a high salary that appears disproportionate to its financial position, the Department may ask a deeper question:
Can this business genuinely sustain this role?
This is where Market Salary concerns often intersect with the Genuine Need test.
The Genuine Need requirement asks a straightforward question:
Does this business genuinely require this role at this level?
It is not enough that a business wishes to sponsor someone. The position must make commercial sense within the context of the organisation.
The Department considers:
- The size and nature of the business
- Revenue and financial performance
- Staffing structure
- Operational activities
- Growth trajectory
The focus is substance over form.
Be Where Sponsors Are Being Refused on Genuine Need Grounds
Disproportionate Senior Roles in Small Businesses
Consider a café employing five staff nominating a full-time “Restaurant Manager” with high-level strategic responsibilities. Or a small mechanical workshop nominating a “General Manager” despite having no layered management structure.
If the scale of operations does not support the seniority of the role, the Department may conclude that the need is not genuine at that level.
The title alone does not establish necessity.
Inconsistent Financial Performance
If financial statements show limited turnover, declining revenue or minimal profit, yet the business seeks to sponsor multiple skilled employees, this inconsistency may raise concerns.
The Department may examine:
- Business Activity Statements
- Tax returns
- Profit and loss statements
- Payroll records
- Lease agreements
- Client contracts
Where the documentation does not demonstrate operational demand, the nomination may be refused.
Generic Business Plans
New businesses face additional scrutiny. A templated business plan with broad projections and no supporting contracts is unlikely to satisfy the Genuine Need test.
The Department expects details such as evidence of client pipelines, confirmed work, supplier arrangements and credible financial forecasting.
Repackaging an Existing Role
Where a visa holder is already employed in a lower-skilled position and the nomination mirrors those duties under a higher-skilled title, the Department may question whether the role genuinely meets the nominated classification.
The assessment looks beyond terminology to the actual work performed.
Here Comes the Refusals
A nomination refusal is not a minor inconvenience.
It can mean:
- Loss of government application fees
- Disruption to workforce planning
- Delays in addressing critical skill shortages
- Increased scrutiny on future sponsorships
- Operational strain during already challenging labour conditions
For industries already under pressure like healthcare, mining, automotive, trades and hospitality, such setbacks can be significant.
The Bigger Picture: Integrity in a Tight Labour Market
Australia’s migration framework seeks to balance two objectives:
- Supporting businesses facing genuine skill shortages; and
- Protecting the integrity of the labour market.
The increased scrutiny on Market Salary and Genuine Need reflects this balance.
Sponsors who approach migration strategically with evidence-based preparation and careful alignment between duties, salary and business structure are far more likely to achieve sustainable outcomes.
Those who treat sponsorship as a paperwork exercise face growing risk.
Turning Risk Into Strategy
Skilled migration should not be reactive. It should form part of a broader workforce strategy.
Practical steps for employers include:
- Defining the role based on operational needs, not visa objectives.
- Benchmarking salary using multiple credible data sources.
- Ensuring financial records support the proposed remuneration.
- Maintaining accurate organisational charts and position descriptions.
- Reviewing sponsorship compliance regularly.
These measures are not simply defensive. They strengthen the overall credibility of the business.
RSG: A Long-Term Workforce Partner
At Rehman Sheriff Group, we work with Australian employers across industries experiencing sustained labour shortages.
Our role is not limited to preparing visa applications. We assist businesses with:
- Visa and Sponsorship strategy
- Skills and Labour Acquisition planning
- Workforce Retention and Compliance management
- End-to-end workforce solutions aligned with commercial realities
We examine occupation alignment, salary benchmarking, financial capacity and organisational structure before lodgement. By identifying potential concerns early, businesses are better positioned to avoid refusal and maintain compliance.
In a labour market where skilled workers are critical to growth, sponsorship decisions should be deliberate, structured and sustainable.
Looking Ahead
Market Salary and Genuine Need tests are now central pillars of employer-sponsored visa assessments.
Sponsors are being refused where:
- Salaries are inadequately evidenced,
- Duties do not match the nominated occupation,
- Financial records do not support the role, or
- The commercial rationale for the position is unclear.
Australia continues to require skilled workers. That reality has not changed.
What has changed is the level of scrutiny.
For employers serious about building a stable, compliant and sustainable workforce, careful preparation is no longer optional.
If your business is considering sponsorship or reviewing an existing arrangement, Rehman Sheriff Group can assist you to assess risk, strengthen compliance and plan your workforce with confidence.
Contact RSG to discuss how we can support your organisation with structured, compliant and commercially sound workforce solutions.
