LEGISLATION to crack down on foreign workers will require employers to prove they have been unable to find Australians.

The Australian Chamber of Commerce and Industry has slammed the proposed laws.

A Coalition MP labelled the government xenophobic over the move to crack down on employers who use 457 visas for skilled overseas workers.

The new legislation will require employers to test the market and prove they have tried to hire someone with appropriate skills locally.

Employers will have to advertise a position as a minimum, but may also have to take their positions to jobs expos or recruitment agencies to search for local workers.

Using foreign workers to fill critical gaps in industries such as healthcare will be exempt.

"While some changes may need to be made, there are proposals here which look like overreach and mad scrambling to plug an imaginary hole," Chamber of Commerce chief executive Peter Anderson said.

Immigration Minister Brendan O'Connor said the legislation was required to protect jobs for Australians, drawing interjections from Manager of Opposition Business Christopher Pyne, who accused the government of xenophobia.

"This very important legislation ensures that Australian residents and citizens will be preferred," Mr O'Connor said.

The legislation will also require employers who hire people on 457 visas to put aside 1-2 per cent of their payroll for staff training.

Foreign workers who have been mistreated will also be able to remain in Australia for an extra 62 days after they leave a job.

After Question Time, Labor MP Stephen Jones was to speak on the 457 visa issue, but the debate couldn't proceed because Mr Jones was not in the chamber.

He had been chosen by Speaker Anna Burke over Opposition Leader Tony Abbott, who appealed in vain to be given the right to speak on his own matter.

###