SYDNEY - Legislation passed by the Australian Parliament to force employers to look local before hiring workers from overseas through the 457 temporary visa system was Monday criticised by the Western Australian Chamber of Commerce and Industry.

Under the legislation, employers will be required to conduct labor market testing before hiring by placing job advertisements in the Australian market, and showing evidence of doing so.

James Pearson, chief executive of the WA Chamber of Commerce and Industry told the ABC that the regulation is unnecessary and will make the hiring process more time consuming and costly for employers.

The Australian Minister for Immigration and Citizenship, Brendan O'Connor, Friday said the new law would protect local workers and opportunities for young Australians, by reserving the 457 visa for industries with genuine skills shortages.

"In addition to the rorting we have seen of the 457 visa system, since this Bill has been before the Parliament, we've seen even more examples, including rorting in the IT industry, exploited workers in the automotive industry and local workers being displaced by people on 457s," O'Connor said.

"Most Australians would expect that employers look local first before hiring workers from overseas, and these legislative changes will ensure that occurs where it's not already happening," he added.

Overseas visa holders who do make it through the system will have the same pay and conditions as local workers are guaranteed, plus an extension of the visa from 28 to 90 days after employment ends -- allowing workers more time to organise their trip home or to look for another job.