This chapter reviews the design and application of labour market tests across OECD and EU countries. It offers an overview of how countries prioritise the resident labour force vis-à-vis temporary labour migrants. It reports the mandatory vacancy advertisement procedures and times, and how exceptions are applied.
Admitting Labour Migrants
Making Migration Management Work
Abstract
Labour market tests (LMTs) are among the most commonly used policy instruments through which OECD countries regulate foreign workers’ access to their labour markets. Their formal objective is to verify that the recruitment of a migrant worker responds to an acute labour shortage and does not displace or adversely affect the resident workforce. In principle, LMTs operationalise this objective by requiring employers to post a vacancy publicly, wait for a specified period and demonstrate that no suitable candidate could be recruited from the pool of available resident workers before resorting to international hiring.
In practice, however, LMTs serve multiple and sometimes competing functions within labour migration systems. Beyond their economic rationale as a tool to identify labour shortages, they also perform administrative roles. Administratively, LMTs structure the sequencing of recruitment and admission procedures, outline responsibilities between labour and immigration authorities, and often reinforce the role of public employment services (PES) in vacancy registration and data collection. Across OECD countries, these functions are weighted differently, shaping how strictly LMTs are applied and what outcomes they are expected to produce.
As a result, while LMTs are often framed as safeguards protecting local employment, their design and enforcement vary substantially across countries and migration pathways. Some systems rely on “adversarial” reviews in which employers must prove unsuccessful local recruitment, while most others place the burden on public authorities to search for local candidates and propose them to the employer, or simply require vacancy posting for a minimum period before approval is granted by default. In many cases, the LMT operates less as an active matching instrument and more as a procedural checkpoint embedded in the admission process. This variation points to different institutional choices about what the LMT is intended to achieve.
Despite these differences, most LMTs share three core features: a principle of priority for the resident labour force, although this definition varies; a mandatory minimum period during which a vacancy must be advertised; and a form of verification of recruitment efforts before a foreign worker can be hired (McGovern, Thielemann and Hammoud-Gallego, 2025[1]).
These elements appear – under different names and institutional arrangements – in 33 of the 41 countries analysed in this study. However, their application is highly targeted. Only around one‑third of all pathways examined require an LMT, and these requirements are concentrated primarily in low- and medium-skilled or general admission categories. Highly skilled pathways, by contrast, are more often governed through salary thresholds, education requirements, or explicit exemptions, with labour market testing playing only a limited role. Table 3.1. details the list of countries that do not use the LMT as a key policy tool, and the alternative tool they utilise. Two EU countries – Poland and Sweden – rely mainly on salary thresholds instead of the LMT to decide whether a foreign worker can be admitted.
Main tools utilised by countries to substitute the LMT
Source: OECD Secretariat
This chapter examines how LMTs are implemented across OECD countries by focussing on four key dimensions: how resident workers are prioritised; where and for how long vacancies must be advertised; who verifies compliance with the test; and how exceptions are granted and managed. This analysis situates LMTs within the broader governance frameworks in which they operate. In doing so, it highlights the trade‑offs countries face between credibility, administrative burden, and responsiveness to labour market needs, and shows that the effectiveness of an LMT often depends less on its formal design than on how well it aligns with real‑world recruitment practices and policy objectives.
The principle of prioritising the local workforce over international recruitment is well-established across the OECD. It was first codified by the Organisation for European Economic Co‑operation in 1953, when it ruled that member countries could admit foreign workers “as soon as it is established that suitable labour, national or foreign, forming part of its labour force, is not available within the country for the employment in question” (OECD, 1953[2]). In this sense, employers in most OECD countries are generally required to draw upon the pool of workers who do not require work permit authorisation before resorting to international recruitment. This prevents employers from circumventing the local labour market to undercut wages, and, in some cases, it may incentivise investment in the resident workforce.
In this context, the LMT serves as a regulatory safeguard, compelling employers to demonstrate that their demand for foreign labour stems from a genuine shortage. This means that employers must demonstrate that there are no workers available in the resident labour force. The “resident labour force” may be local, regional, national, or, in some EU Member States, even defined to encompass any EU/EEA citizen anywhere in the EU or worldwide. Box 3.1. discusses this “community preference principle” in more detail.
The EU-wide labour market test in practice
When verifying worker availability within the resident labour force, the EU represents an unusual case, since the pool of potential jobseekers could extend to all EU nationals, regardless of their member state of residence, since they are all eligible to take up employment within a Member State. Most EU jurisdictions satisfy this principle by cross-posting vacancies on the EURES Job Mobility Portal. This procedural step generally satisfies the requirement for employers to provide substantive proof of having searched for available workers across the entire EU.
While most EU public employment services automatically post vacancies on EURES or require employers to do so, active verification of availability of job-seekers outside of the country remains rare (Table 3.2). Estonia, Germany, and the Netherlands perform active verification. In Estonia the Unemployment Insurance fund checks that no suitable Estonian or EU/EEA candidate is available before allowing a third-country hire. However, its reference pool comprises registered unemployed in Estonia and other jobseekers using Estonia public employment services. It can publish vacancies on EURES, but this is not required.
Similarly, the Flemish Region of Belgium employs what it calls a “concentric model” of recruitment, but which in practice requires employers to search for candidates at the regional, national, and EEA levels simultaneously through mandatory postings on local and EU portals. The Netherlands posts vacancies on its national portal, but not necessarily on EURES, unless the PES or the employer chooses to do so; EURES posting is not a legal requirement. In contrast, Sweden does not formally apply a labour market test but mandates a 10‑day vacancy posting as a means to satisfy community preference.
The Community Preference principle
These cases, however, reflect national policy choices rather than an EU‑level requirement. While there is a Community Preference principle, it requires employers to give preference to EU nationals over third-country nationals. This means that whatever territorial definition is used for “resident” labour force, the labour market test must consider EU nationals residing in that territory before opening to recruitment of third-country nationals. This neither implies nor requires an EU‑wide LMT. Further, an EU-wide labour market test requirement is not codified in EU law and has never functioned as a binding or uniform obligation.
Vacancy posting on EURES for LMT in EU countries
Note: NA means not applicable.
Source: OECD Secretariat; Robin-Olivier, S. (2016[3]), “The Community Preference Principle in Labour Migration Policy in the European Union”, http://dx.doi.org/10.1787/5jlwxbzcfsq6-en
Outside of the EU, 11 OECD countries utilise the LMT as an admission policy lever, although they follow different approaches to establish priority hiring for the resident labour force. Among traditional settlement countries, Australia, Canada, and the United States apply some form of the LMT to most of their temporary migration pathways, while New Zealand applies it only to the seasonally limited permits.
Out of the four Latin American OECD countries, only Colombia and Costa Rica report the use of a formal LMT. In Colombia, the mechanism is largely employer driven. Visa applicants must submit a motivation letter that justifies the inability to recruit a Colombian citizen for the role and substantiates the company’s contribution to the local economy with details on the number of direct jobs generated. In Costa Rica, the Directorate of Migration follows a negative‑list approach (see Chapter 5 of this report) and conducts a technical occupational study to assess labour demand and local availability, before it determines whether to admit the foreign worker. Neither Mexico nor Chile apply any form of the LMT but rely instead on a strict 10% and 15% threshold for foreign employees per firm. In Asia, the LMT is less prevalent as a policy tool. However, Korea applies it strictly to its non-professional E‑9 visa, where vacancy posting on the public employment portal and working the Employment Service Centre (ESC) to find a candidate are both mandatory. Additionally, employers are only allowed to recruit from an HRD Korea-vetted list of foreign candidates from partner countries and are subject to strict quotas and firm-size thresholds. The E‑7 visa for skilled workers is subject to both a letter of justification requirement – Employment Recommendation Letter – similar to Colombia’s, and a local-foreign employee ratio.
The minimum mandatory advertising requirement that most OECD countries apply means that employers must advertise the vacancy for which they intend to hire a foreign national for a specified period that – in theory – is considered sufficient for qualified members of the resident labour force to apply for the job. If the waiting period expires and no suitable candidate is found among local workers, the employer may be authorised to move forward with international recruitment and apply for the required permit. In a few countries, such as Italy, Czechia, and Portugal, approval is issued by default after the posting period expires if no workers have been identified. However, most countries require a review and positive assessment of the LMT by labour authorities.
Regarding the posting mode required for LMTs, only two countries – Australia (certain visa streams) and New Zealand – allow employers to fulfil mandatory advertising obligations through private online recruitment platforms such as LinkedIn or Indeed. In all other OECD countries, employers must post vacancies either through traditional media outlets or via public employment services, which publish them on national job portals and public job banks. This distinction matters because public and private platforms do not reach the same audience: public platforms in most countries are better at capturing vacancies for less qualified and mid-skilled employment, with comparatively fewer postings for highly qualified roles. EURES, for instance, shows a concentration of vacancies in low- and medium-skilled occupations. By contrast, although recruitment across the OECD has increasingly shifted toward digital platforms generally, evidence shows that vacancies on private recruitment sites and social media are concentrated in high-skilled occupations specifically (Vermeulen and Gutierrez Amaros, 2024[4]; Tsvetkova et al., 2024[5]) – precisely the channels most OECD countries exclude from the mandatory advertising requirement. As a result, where LMT obligations are limited to public job portals, they risk testing only part of the resident labour force for higher-skilled positions, missing the platforms candidates for these roles are most likely to use. While public employment services can still play a valuable role in reaching a broad range of workers across skill levels, including private and social media platforms in the LMT process could help ensure the test reflects where high-skilled candidates actually search for jobs.
Table 3.3 shows a clear convergence across OECD countries toward online, PES-based posting, often combined with EURES in the EU. Most EU/EEA systems rely on centralised administrative portals (sometimes with matching rather than open advertising), while non‑EU countries more frequently require mixed models that add private job boards, print media, or multiple recruitment channels to demonstrate effort. Purely offline posting is rare, and hybrid online/print requirements persist mainly in Australia and the United States.
Posting mode for the labour market test across OECD labour migration pathways
Note: Austria, Colombia, Costa Rica, Estonia, Greece, Israel, and Lithuania apply an LMT but do not have an advertisement requirement. Sweden does not apply a formal LMT but has a mandatory posting requirement.
Source: OECD Secretariat
With regard to the duration of mandatory posting, Figure 3.1 shows mandatory posting times for the 24 OECD countries that impose this requisite on at least one of their labour migration pathways. The median waiting period across all pathways is 15 calendar days. EU countries have both the shortest and the longest mandatory posting period. The Flemish region of Belgium stands out with the longest LMT at 9 weeks (63 days), whereas Czechia has the shortest period at 0 days.1
LMT mandatory advertising periods in calendar days
Note: For comparability purposes, business days have been converted to calendar days, taking the lowest value in the range. For example, 8 business days can be between 10 and 12 calendar days, so 10 days are reported. Three countries have more than one minimum advertising period, which depends on permit type: Belgium (Flanders v. other regions), Canada (seasonal v. non-seasonal), and Luxembourg (salaried v. temporary worker). Out of the 41 countries covered, nine have an LMT but do not apply this requirement, and are therefore not included: Austria, Colombia, Costa Rica, Estonia, Germany, Greece, Israel, Lithuania, and Switzerland. Sweden has a mandatory posting requirement although it does not apply a formal LMT.
Source: OECD Secretariat
In Flanders, employers seeking to hire workers whose occupation is not regulated through a specific permit (highly- and medium-skilled, managerial, specialised technician, etc.) must apply to the “Other categories” permit, which not only mandates that the occupation appears on the VDAB (public employment service) list of shortage or bottleneck occupations but also requires an LMT. The employer must post the vacancy for at least nine weeks within the four months prior to the application on both VDAB and EURES platforms (with automatic publication on EURES) and request additional assistance from VDAB to help fill the vacancy. This combination of policy tools – a SOL requirement, a long LMT and the active intervention of the PES – makes this permit one of the most restrictive in OECD countries.
Other notable examples in this regard are Luxembourg and Canada, which differentiate minimum posting times according to migration category. In Luxembourg’s case, employers seeking to hire salaried workers face shorter LMT waiting periods – around 9 days – than those hiring temporary (28 days) and seasonal workers (35 days). Canada has a mandatory posting period for non-seasonal vacancies (28 days) that is twice as long as that required for seasonal or temporary pathways (14 days). Under new low-wage stream requirements, as of 1 April 2026, employers submitting an LMT for low-wage positions must demonstrate that they have advertised their position for a minimum of 8 consecutive weeks (Government of Canada, 2026[6]). The Canadian LMT is also one of the strictest in the OECD (see Highlighted Approaches section below). In this sense, the length of the LMT may, in certain cases, signal the sectors or categories in which countries face more acute shortages or where they seek to prioritise international recruitment, highlighting not only the LMT’s role as an admission requirement, but also how it can be calibrated to incentivise or deter the use of a given permit.
Within the EU, there is a wide range of LMT practices, and the length varies from none to 63 days. Among EU countries, the average mandatory posting requirement is 21 days, 6 days above the median period among OECD countries. Belgium, the Netherlands, and Luxembourg stand out as the countries with the longest LMTs.
A key characteristic of LMTs is who verifies the prioritisation of the resident labour force and how this verification is undertaken. Some PES have opted for reviews that require employers to prove they cannot hire a local worker (e.g. Canada). Others, such as Spain and Flanders (Belgium) place the responsibility on the PES itself, which has to search for local candidates among its unemployed workers’ pool, refer them to employers, and request justification for non-hire. Authorities in Austria, Estonia, France, Lithuania, Luxembourg, Slovenia, and the Slovak Republic actively review their unemployment registries and refer candidates for employers to consider, although there is no requirement to justify non-hires. The Netherlands PES reviews work permit applications and rejects those for which it considers resident workers to be available; in Wallonia applications for jobs not on the SOL are generally rejected in first instance (OECD, 2025[7]). There are at least two cases where vacancy posting is nominal, where the LMT is approved immediately (Czechia) or by default after a certain period of time without a positive assessment required (Portugal). Default approval in the absence of response is also granted in Italy, where the PES is required to post the vacancy for eight days, but not required to issue a positive response. Another important consideration is that in many cases employers seek international candidates and select them before engaging in an LMT, especially if the mandatory vacancy posting is on a platform (the public employment service) which is not usually used for recruitment by the employer.
In certain OECD countries outside Europe, this process is employer-driven, with posting on private platforms. Vacancy posting is the responsibility of the employer, who needs to find the appropriate channel to post their vacancy and then present evidence of compliance to the labour authorities. In Australia, for example, employers under certain visa streams must post at least two advertisements on either approved national platforms, industry-specific websites, national print media or radio – social media is generally not acceptable 2– for four weeks in the four‑month period preceding the visa application. Australia’s Department of Home Affairs reviews the evidence and determines whether the employer has met the LMT requirement. The United States, for permanent economic migration under the EB‑2 and EB‑3 channels, for example, requires employers to post vacancies not only with the State public employment service and on-site, but also in two Sunday newspapers and, for professional occupations, in other channels. In the EU, only Denmark operates an employer-driven LMT and only for its supplementary pay limit scheme. This pathway requires a sworn declaration from the employer that attests no resident worker could perform the job, provided the seasonally adjusted gross unemployment rate does not exceed a certain threshold.3
In other cases, the employer must collaborate directly with the PES to recruit a candidate from the resident labour force. Iceland, for example, requires employers to post a general job advertisement (not tailored to the applicant) on Iceland’s Directorate of Labour (DoL) website and on EURES. Employers must also seek assistance from the Directorate to locate a suitable candidate who already holds unrestricted access to the Icelandic labour market (from the EEA, EFTA states, or the Faroe Islands). Furthermore, employers must obtain the opinion of the relevant labour union regarding the recruitment of a foreign worker. They submit this opinion with their application to the DoL. The DoL then conducts a comprehensive assessment of staff availability on the national labour market and within the European Economic Area before it issues a final resolution.
In most EU countries, the LMT functions more as a procedural formality than an active policy tool. Employers generally need only post a vacancy and allow the mandatory minimum period to elapse before they lodge a visa or permit application. Across the majority of EU Member States, public employment services – even those referring candidates – do not expend substantial resources to actively recruit candidates from the resident workforce. However, there are no cases in which the PES is not involved at all in the LMT.
Another less common but innovative model is the government-led local LMT. Korea’s E‑8 seasonal employment programme, launched as a pilot in 2015 and formalised in 2021, requires local authorities, not employers or the employment service, to assess the availability locally of resident workers to fulfil jobs in the agricultural and fishing sectors. If this assessment is negative, municipalities can submit a request for a seasonal worker quota, which is then distributed among local employers. This framework could be effective in addressing specific labour shortages while formalising seasonal migration channels to reduce irregular migration and enhancing the role of local governments in labour migration governance (OECD, 2019[8]). However, this raises the question of whether local authorities are primarily trying to place local unemployed workforce, or helping local businesses to easily recruit internationally.
Many labour migration systems incorporate provisions that automatically waive the LMT to advance strategic economic or political priorities. Across the OECD, 28 countries report that they apply LMT exemptions in at least one of their pathways. Of this group, 17 are EU Member States. These exceptions fall into five distinct categories: shortage occupation lists, high education or salary thresholds, international agreements, sector-specific exceptions for priority industrial sectors, and administrative exceptions. Table 3.5 summarises these categories and lists examples of pathways that utilise each exception.
The most common way to bypass a Labour Market Test (LMT) is through a shortage occupation list. These lists identify roles with verified shortages where an LMT would add little value, slow recruitment, and discourage employers. By exempting these roles, governments reduce friction and accelerate the recruitment process.
Eight OECD countries apply this type of exception in at least one of their pathways. Notably, countries with generalist, streamlined labour migration systems – where a general employment permit serves as the entry point for various workers, such as Spain, Luxembourg, and Finland – frequently apply these waivers. In these systems, exceptions become a key policy tool to streamline or restrict labour market access. Conversely, in countries with highly fragmented and occupation-specific admission frameworks, dedicated pathways for shortage occupations are more common. Examples include Australia’s Core Skills Stream, Austria’s RWR Card for Skilled Workers in Shortage Occupations, and Flanders’ Shortage Occupation pathway.
While shortage lists target specific occupational deficits, many OECD countries also establish LMT exceptions based purely on economic value through high education and salary thresholds. For these high-skilled roles, competition with the resident labour force is often minimal, and government see their skills as desirable for strategic economic goals. Consequently, thresholds serve as the primary tool for governing labour market access, rendering an LMT superfluous. Ireland, Belgium, New Zealand, and Slovenia apply this type of exception. Other countries follow a slightly different model by creating a separate high-paying or highly qualified pathway with its own set of eligibility criteria. Prominent examples include the high-wage stream of Canada’s Temporary Foreign Worker Program, the specialist skills stream of Australia’s Skills in Demand visa, Denmark’s Pay Limit Scheme, and the Blue Card in EU Member States (see Box 4.1.).
Additionally, certain pathways may be exempt from labour market testing based on educational thresholds. For example, pathways for researchers in all OECD countries covered in this report are not subject to the LMT. In the EU, the basis for admission is generally a hosting agreement with a recognised research institution – usually a university or research centre – and a high educational threshold, such as a master’s or doctoral degree. While the EU’s Students and Researchers Directive only requires the applicant to have “sufficient resources to cover subsistence costs without having recourse to the Member State's social assistance system, and return travel costs” (European Parliament and Council of the European Union, 2016[9]), some countries require the minimum wage (Bulgaria, Hungary, Luxembourg and the Netherlands), while others apply a specific threshold or reference (Austria, Belgium, Denmark, Finland, Ireland, Norway and Sweden). However, these requirements are generally lower than for other highly skilled pathways. Thus, if the national legislation relies on a broad definition of the kind of institutions that can conclude hosting agreements, the research permit could potentially be an attractive permit for very highly skilled workers who perform research functions.
With only a few exceptions, most EU countries do not apply an LMT to Blue Card applications
The EU Blue Card is a residence and work permit for highly qualified third-country nationals that facilitates mobility across Member States, based on high salary and education requirements. Introduced in 2009 through the EU Blue Card Directive, the permit initially faced low uptake and implementation challenges, which prompted a legislative recast in 2021. The recast EU Blue Card Directive sought to harmonise the EU approach to highly qualified migration. It positioned the EU Blue Card as the cornerstone of this strategy, equipped “with faster procedures, more flexible and inclusive admission criteria, and more extensive rights, including facilitated intra-EU mobility.” (2021 EU Blue Card Directive, paragraph 5).
Although 12 Member States already exempted this high-skill pathway from the LMT by 2021, the recast Blue Card Directive did not mandate the elimination of these tests. Instead, the directive retained provisions that allow countries to reject applications based on “the labour market situation” to safeguard the resident workforce. Nevertheless, five countries – Czechia, France, Poland, the Slovak Republic, and Spain – opted to abolish the LMT requirement for the Blue Card in their national legislation during the transposition period. Consistent with the prevailing practice across the EU, these Member States likely concluded that existing education and salary thresholds already provided stringent labour market safeguards. Consequently, administrative simplification was possible to better align national frameworks with the Blue Card Directive, reduce wait times, and enhance the scheme’s overall attractiveness.
Table 3.4 summarises the application of the LMT requirement for the Blue Card across EU Member States, providing context on the exemption, abolition or retention of this policy tool.
Note: N/A stands for not applicable.
Source: OECD Secretariat; European Parliament and Council of the EU (2021), Directive (EU) 2021/1883 of the European Parliament and of the Council of 20 October 2021 on the conditions of entry and residence of third-country nationals for the purpose of highly qualified employment, and repealing Council Directive 2009/50/EC, http://data.europa.eu/eli/dir/2021/1883/oj
Furthermore, several countries establish exceptions to the LMT to support international agreements. This approach allows countries to expedite labour market access for nationals of specific partner states. For instance, Portugal exempts citizens of the Community of Portuguese Language Countries from the LMT. Slovenia allows nationals from Bosnia and Herzegovina and Serbia to bypass the test based on bilateral employment agreements. Similarly, the United States waives the Labour Condition Application requirement for TN visa applicants from Mexico and Canada, a category negotiated under the US – Mexico – Canada Agreement (USMCA). On reciprocal benefit grounds, Canada applies an exception to the LMT for US and Mexican professionals through its International Mobility Program. Authorities link specific LMT-exempt streams to bilateral agreements or other regional and federal initiatives, such as the International Experience Canada programme and the Provincial Nominee Program. France has signed 16 bilateral labour agreements (BLA) with partner countries that include LMT exceptions for specific occupations. However, the use of these BLAs is limited (OECD, 2017[10]).
Sector-specific LMT waivers constitute another notable exception. The main aim of these waivers is to provide targeted relief for industries experiencing a chronic need for workers that the resident labour force cannot fill. In some cases, designing this type of waiver involves negotiations with key social partners, such as trade unions and business associations. These stakeholders agree to specific conditions under which an automatic LMT waiver is desirable without undermining the available domestic workforce. Austria, for example, waives the LMT and allows registered seasonal workers who have worked in the same economic sector for at least seven months in each of the previous two calendar years to apply for an RWR card (a combined work and residence permit). To qualify, these workers must prove basic German language skills, hold a permanent employment contract, and demonstrate compliance with applicable wage, working, and social security conditions.
Another category of exceptions is based on numerical limits. As long as a country has not reached its authorised permit quota, the LMT is not applied. Once the quota is filled, authorities may apply an LMT to manage the admission of any additional workers. Israel, Norway and Romania utilise this volume‑based model. However, while Romania’s is based on its General Annual Quota, which applies to all types of foreign workers, Norway has pathway-specific quotas. Israel further simplifies this by exempting vacancies from the LMT entirely when they fall under pre‑established quotas.
Finally, countries can apply exceptions to the LMT for specific administrative reasons. For example, Czechia and the Slovak Republic do not apply an LMT by default for certain highly skilled pathways but incorporate a statutory safeguard clause that allows them to reintroduce it if the labour market experiences serious disruptions or a sudden increase in unemployment. Austria, Finland and Spain do not apply an LMT to returning seasonal workers and Luxembourg does not apply an LMT to workers with a long-term resident status in another EU Member State.
Labour market testing exceptions in OECD countries by category
Source: OECD Secretariat
Robust empirical evidence on the effect of the LMT on the likelihood of international recruitment is limited. Before‑and-after studies on the impact of imposing or relaxing an LMT on recruitment are limited. In some cases, the relaxation of the labour market test has not led to a notable increase in labour migration in labour market tested categories (OECD, 2011[11]). One of the only studies specifically estimating the causal effect of lifting the LMT requirement on the inflow of non-EU workers to specific regions and occupations. Exploiting regional variation in occupation-specific LMT exceptions in Finland, findings suggest a clear causal link between the elimination of the requirement and an increase in the inflow of third country nationals to that specific region and occupation. (Nieminen et al., 2025[12]) Even a nominal labour market test can in fact impact the likelihood of businesses to apply for authorisation to hire from abroad and consequently the level of labour migration admissions.
Similarly, restrictive labour market tests with high rates of rejection or refusal can also discourage employers from resorting to international recruitment. However, evidence on this mechanism is limited and only a few OECD countries publicly share rejection or refusal rates for the LMT. Out of the 41 countries surveyed for this study, only Australia, Estonia, Finland, the Netherlands and the United States make rejection rates for certain pathways public. Table 3.6 summarises the available data, highlighting, for example, the Netherlands’ restrictive low- and medium-skilled pathway (Residence and Work permit), which has an LMT rejection rate of around 27% in 2025, or Estonia’s overall rejection rate of 17% in 2024. Previous OECD evidence also suggests that the rate of rejection can vary significantly by nationality, and occupation. In Germany, engineers and medical professionals faced rejection rates of 2‑4%, whereas labourers and cleaning staff had rejection rates above 50% (OECD, 2013[13]).
The great majority of OECD countries, and all EU countries, have no fee to conduct an LMT. In most cases, the cost of the LMT is covered by the application fee itself, or involves activities which are performed by the public employment service as part of their mandate to serve job-seekers and employers. However, even in these cases, the LMT imposes a cost on employers, in terms of additional time and human resources to file a vacancy.
Only Canada charges a fee for the LMT. Canada’s LMT has a EUR 616 (CAD 1 000) fee and is applicable to all applications to its Temporary Foreign Workers Program. The fee serves two purposes: recover the cost of processing the application and discourage unnecessary applications for positions in which the resident labour force could be recruited.
Rejection rates for select labour migration pathways to OECD countries 2024-2025
Source: OECD Secretariat, U.S. Department of Labor.
This section delves deeper into three contrasting examples of labour market tests that incorporate innovative elements to examine labour shortages and establish the need for international recruitment.
Canada’s Labour Market Impact Assessment
Canada applies a strict version of labour market testing through the Labour Market Impact Assessment (LMIA), which is a requirement for all applications in the Temporary Foreign Worker Programme (TFWP). Given that TFWP administers an LMIA fee per position requested, which is intended to offset the costs of programme administration, only employers with serious intentions of engaging in international recruitment are likely to apply.
Before lodging an application for the TFWP, employers must determine if the position is high- or low-wage. This refers to the provincial or territorial wage threshold, which is the “the applicable provincial/territorial median wage plus (+) 20%” (Government of Canada, 2025[14]). Employment and Social Development Canada’s review of the application includes an examination of whether hiring the foreign worker will have a positive, neutral or negative impact on the Canadian labour market, considering whether, among other things, there are qualified Canadians or permanent residents available to fill the position. For the low-wage stream, there is a strict 10% cap on the number of low-wage foreign workers per employer (OECD, 2025[15]).
Before applying for an LMIA, the employer must conduct at least 3 different recruitment activities to show they have made an effort to hire Canadians and permanent residents before offering a job to a temporary foreign worker, including: advertising on the government of Canada’s Job Bank and conducting at least two additional methods of recruitment that are consistent with the occupation – i.e. target an audience that has the appropriate education, professional experience or skill level required for the occupation. For high-wage positions, one of the methods used must be national in scope and easily accessed by residents of any province or territory, as people in high-wage positions are often mobile and willing to relocate for work. For low-wage positions, employers must target underrepresented groups in their recruitment efforts, including Canadian youth, as such positions can serve as an opportunity to gain a foothold in the labour market. Additionally, at least one of the three recruitment activities must be ongoing until the date a positive or negative LMIA has been issued.
The Seasonal Agricultural Worker Programme (SAWP) – a G2G seasonal worker framework that Canada implements with Mexico and several Caribbean countries4 – is part of the TFWP and follows a similar LMIA process. Employers participating in SAWP are exempt from the LMIA processing fee. As with all employers participating in the Temporary Foreign Worker Program, SAWP employers must demonstrate that they can provide a workplace that is free of abuse. Where a unionised position is sought, the TFW Program requires that the wages and working conditions offered to the temporary foreign worker are consistent with the applicable collective agreement. The TFW Program also assesses whether hiring a temporary foreign worker is likely to adversely affect the settlement of a labour dispute in progress or the employment of any person involved in the dispute; where that is the case, access to the Program will not be granted.
In contrast, in the Global Talent Stream Programme (GTS) – another programme in the TFWP designed to allow innovative firms to access highly skilled global talent to scale up and grow – employers are also required to apply for an LMIA, but specific conditions apply. Companies must work with ESDC to develop a Labour Market Benefits Plan (LMBP) that demonstrates their commitment to activities that will have lasting, positive impacts on the Canadian labour market. The LMBP helps the Government of Canada identify and track the company’s overall job creation, skills and training investments and other activities that will benefit the Canadian economy through the employment of highly skilled global talent. In this case, the minimum advertisement requirement is not enforced, and the GTS is designed as a facilitative, fast-track LMIA with a two‑week processing standard, although employers are encouraged to recruit the resident labour force before offering a job to a temporary foreign worker.
United States’ H‑1B Labor Condition Application
The United States’ main labour market testing tool is the Labor Condition Application (LCA), which is a requirement for the H‑1B visa – the main temporary high-skilled pathway. The LCA model is attestation-based, in which the employer states that the worker will be paid at least the prevailing wage, that the employment will not adversely affect similarly employed US workers, and that other workers and the concerned union have been notified of the intention to hire a foreign worker.
Notably, this visa does not require employers to actively recruit from the resident labour force, except for two types of employer: H‑1B dependent and wilful violators.5 In these cases, the employer must present additional attestations, where they declare their good faith efforts to recruit an “equally or better qualified U.S. worker” and are required to not displace a US worker within 90 days of filing an H‑1B petition.
In this sense, the United States has opted for a model where the LMT is used as a penalty that is only triggered after the employer is found to have overused or abused the H‑1B system. In essence, this means that the US government relies mostly on the salary threshold established through the prevailing wage requirement to govern admissions to the labour market through this pathway. Other pathways in the United States, mainly permanent employment sponsorship (not covered in this study), require a PERM labour certification – a labour market test in the traditional sense, including a mandatory advertising period and formal certification of recruitment efforts.
Spain’s National Employment Situation requirement
Spain is an example of a strictly applied LMT combined with a very frequently updated shortage occupation list, and specific foreign policy or strategic exceptions. Spain allows employers to hire foreign workers through a residence and employment work visa in cases where the national employment situation (NES) warrants it. There are four cases in which this can be proven: 1. the relevant vacancy is on the catálogo de ocupaciones de difícil cobertura (hard-to-fill occupations’ catalogue), which is updated every trimester, 2. for occupations not classified as shortage occupations, where the employer demonstrates to the Immigration Office the difficulty of filling vacant positions with the resident workforce, 3. for nationals of countries with which Spain has an international agreement (Chile and Peru), 4. for groups exempt by Article 40 of the Organic Law 4/2000 (e.g. family members of legal residents, individuals with strong ties to Spain, certain humanitarian protection cases). Particularly in the second scenario, employers are required to work closely with the SEPE (Public Employment Service) and the Provincial Foreigners’ Office to check that there are no qualified, available workers available in the country. This includes both mandatory advertising on the Empléate recruitment portal for eight days and registration of the vacancy with SEPE, which actively looks for candidates among its pool of unemployed workers. Returning seasonal workers are exempt from this requirement.
Labour migration systems rest on the principle that international recruitment requires justification. The burden typically falls on the state or the employer to demonstrate that admission addresses acute needs without displacing the resident workforce. The most concrete way to verify this is by openly offering the job to local workers and see if there are suitable candidates. This is the basic reason why the LMT exists and it remains a popular tool for managing access to the labour market.
However, evidence suggests that job markets in OECD countries are evolving rapidly. The increasing use of digital tools to advertise roles, search for candidates, and assess skills has transformed recruitment (OECD, 2025[16]). The analysis in this chapter suggests that many current LMT structures rely on a conception of job-search which is rapidly becoming outdated. By focussing on public employment services or traditional media, these tests may no longer effectively verify the presence of suitable candidates within the resident labour force.
As both workers and employers rely more heavily on online platforms, the relevance and effectiveness of traditional LMTs are called into question. If these tests do not adapt to contemporary recruitment channels and skill-signalling practices, they risk becoming nominal procedural requirements. In such instances, they lose their objective value, delaying employer access to necessary talent without meaningfully improving opportunities for resident jobseekers.
While core features of the LMT, like resident priority and mandatory vacancy posting are broadly shared, their implementation varies significantly across jurisdictions. This diversity underscores the tension between the theoretical function of the LMT and the practical difficulty of defining “genuine need” across different national contexts and across time.
Governments rarely use LMTs in isolation. Instead, they form part of a layered, flexible system that incorporates shortage occupation lists, high-skill thresholds, bilateral agreements, and quotas. The coexistence of restrictive tests with pathways that waive the requirement entirely illustrates how authorities calibrate their systems to balance competing goals, such as addressing immediate shortages, managing demographic pressures, and economic priorities across sectors and skill levels.
There is still discretional application and lack of transparency in some LMTs. Clear and consistent rules on when and how the LMT will be applied and how long the procedure will take would allow employers to plan their workforce needs accordingly and workers can gain more certainty.
As is clear from OECD countries’ experience, the effectiveness of an LMT depends on its purpose in the labour migration system. The design of its features – length, stringency, exceptions – will yield different results. Rigid or lengthy procedures may intend to scope the resident labour force more thoroughly, but they may discourage employers from using regular labour migration pathways. Nominal or very short LMTs may be simple to implement but they may not ensure that vacancies reach local workers. If labour migration systems aspire to offer transparent criteria, proportionate administrative requirements, and closer alignment between labour market information, real‑world recruitment practices, and admission rules, the LMTs must also take these considerations into account.
References
[9] European Parliament and Council of the European Union (2016), Directive (EU) 2016/801 of the European Parliament and of the Council of 11 May 2016 on the conditions of entry and residence of third-country nationals for the purposes of research, studies, training, voluntary service, pupil exchange schemes or educational projects and au pairing (recast), Official Journal of the European Union,.
[6] Government of Canada (2026), Program requirements for low-wage positions, https://www.canada.ca/en/employment-social-development/services/foreign-workers/median-wage/low/requirements.html#duration (accessed on 14 August 2026).
[14] Government of Canada (2025), Hire a temporary foreign worker in a high-wage or low-wage position, https://www.canada.ca/en/employment-social-development/services/foreign-workers/median-wage.html (accessed on 2 March 2026).
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Source: OECD Secretariat.
← 1. The Czech LMT is a nominal requisite, as employers can begin the employee card application for a foreign worker immediately after posting the vacancy with the Labour Office. However, the minimum posting time can be reintroduced to protect the domestic workforce if conditions in the labour market deteriorate, allowing authorities to easily modify this policy lever whenever necessary.
← 2. While LinkedIn’s online recruitment platform is acceptable, vacancies must be open to the general public to qualify for the LMT.
← 3. A key characteristic of this scheme is that it can be closed entirely if the seasonally adjusted gross unemployment rate exceeds 7.75 pct on average in the 3 months prior to the application.
← 4. Only citizens from Mexico, Anguilla, Antigua and Barbuda, Barbados, Dominica, Grenada, Jamaica, Montserrat, St. Kitts-Nevis, St. Lucia, and St. Vincent and the Grenadines can participate in the SAWP. Most are either from Mexico or Jamaica.
← 5. The Department of Labor defines an H‑1B dependent employer based on its foreign workforce proportions: eight or more H‑1B workers for companies with 25 or fewer employees; 13 or more for those with 26 to 50 employees; or 15% or more of the workforce for companies with 51 or more employees. Willful violators are defined as those employers that have been officially determined to have intentionally or recklessly violated H‑1B programme requirements (including LCA requirements) or misrepresenting material facts. (U.S. Department of Labor, 2008[17]; U.S. Department of Labor, 2008[18]).