Significant work visa changes

July 10, 2019

Nicola Tiffen Partner

The New Zealand government is proposing a major restructure of the work visa system, so as to increase the financial and organisational burden on employers. Consultations ended on 18 March and the finalised proposals should be announced in June.

Licensing regime

Compulsory employer accreditation, which will in effect be a licensing regime, is likely to come into effect from the beginning of 2020. There will be some exceptions, such as intra-company transfers, but almost all other work visa applications are likely to require employer accreditation.

Accreditation requirements are likely to include: demonstrating a pastoral care regime for new migrants; a high level of HR policies and processes; a demonstrable commitment to employing New Zealanders; wage rate increases every time a visa is renewed; and an active training regime for existing employees.

Labour market testing

In April, regionalised occupational shortage lists will be published.  This means that skill and labour market test requirements will be determined by the regional location of the job, rather than on a national basis, as currently occurs. This will create challenges for employers with multiple locations.

The government will negotiate industry-specific sector agreements for the aged care, tourism and hospitality, construction and agriculture industries. Negotiations will begin in June. However, the government has already indicated it will require undertakings, such as a commitment to increased working conditions, in exchange for eased labour market testing requirements.

Finally, the process by which an employer can demonstrate that there are no New Zealanders available for a position, to enable the grant of a work visa, will also alter. This is likely to involve employers having to work with newly created and region-focused government agencies, and perhaps with educational institutions.

Tightening of work-to-residence visa regime

The minimum wage, for work-to-residence visas, will almost certainly increase to around NZ$37.50 per hour in June.

Work-to-residence visas are currently an effective means of moving migrant employees through to residence, when they may otherwise be ineligible, due to the skill level of their employment or their remuneration.  An employer must be accredited, under the current accreditation regime, to support a migrant onto a work-to-residence visa.

Due to the impending increase in the work-to-residence visa remuneration level, New Zealand employers are now fast-tracking accreditation applications, to enable them to move employees on to the scheme, before this effective “loophole” closes by way of the impending remuneration increase.

Positive changes for low skilled migrants and their families

The government is also reviewing a policy that prevents “low-skilled” migrants from obtaining visas for more than 12 months or from bringing partners and children to New Zealand. This policy, also requires “low skilled” migrants to leave New Zealand, for at least 12 months, after three 12-month visas, termed a “stand-down period”.

“Low skilled’ migrants are those earning less than NZ$21.25 per hour, which may soon increase to NZ$25 per hour. A “low skilled’ migrant is also someone earning less than $37.50 per hour, who is working in a “low skilled” occupation. Occupations ranked at Levels Four or Five on the Australian and New Zealand Standard Classification of Occupations (ANZSCO) are “low skilled”.

This policy has created significant issues for employers and migrants who seek to demonstrate that a position matches with a higher skilled occupation, when the immigration authorities assess the position as being at Level Four or Five on the ANZSCO. It is hoped that the government’s review of this policy will provide increased flexibility for both employers and employees.

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