Changes to work visas – As announced by Immigration New Zealand on 17 September 2019

Immigration New Zealand (INZ) has finally provided some detail in their long-expected reworking of work visas. Already there are media articles showing a backlash against the changes, though most reports are covering the statements coming out of parliament. Immigration Minister Iain Lees-Galloway believes the updates will help 30,000 business fill skill shortage gaps. We at Migration Partners, take a different interpretation.

Here is our initial breakdown of the changes, and what they may mean to you as an employer, or as a current or future employee.

Firstly, any changes are not retrospective. It will not change a visa that has already been granted or has already been applied for.

Accreditation Now & in the Future

This is the largest change, though it is still some way away. From some time in 2021, all businesses who wish to employ someone through a work visa will need to be accredited. We expect that there will be a simplified accreditation process introduced, as the current process would be too cumbersome for many smaller and newer businesses. However, as it will need to be done in advance, it could delay a business in hiring an urgently needed employee if they are not accredited.

At present, a business can gain accreditation from INZ. This is a somewhat complicated process, aimed around the business showing INZ that it is a good employer. It requires the business to provide employment agreements, HR documents, health and safety documents, proof of training of New Zealand staff, etc. The business also needs to show that it is financially sound.

In exchange, an accredited employer can provide an employee with a pathway to residence. It starts with a 30-month work visa, which is provided without needing to show proof of a limited pool of potential workers. After 24 months, the employee can then apply for residency, without needing to prove their English level, currently required under a Skilled Migrant Residency Visa.

For this reason we encourage all of our clients who are expecting to hire staff, especially those wanting to attract the very best staff, to gain accreditation, as it provides staff with the easiest pathway to residency. Contact us if we can be of assistance to you in gaining accreditation.

There are only 1381 accredited employers in New Zealand, including all of the government departments. So it is an exclusive group, and one that provides much benefit to member businesses.

The most immediate change is that any application for the Talent (Accredited Employer) Work Visa, (the work visa gained from employment to an Accredited Employer), made from 7 October 2019 onwards will need to have a minimum salary (or a base wage calculated over 52 weeks) of $79,560 being 150% of the median income. The current minimum is $55,000, though it has been at that level since 2008.

There is positives and negatives to the “accreditation for all” approach.

Pros:

  • It will help clean out a number of employers who are not following employment law.
  • It will help ensure that employers are not “selling visas” to employees (where effectively the employee is paying the employer to employ them).
  • It will help fight human trafficking, as we have seen in some recent high-profile cases in New Zealand in the past few years. Stace Hammond provides free legal services to anti-human trafficking charity Dignity Freedom Network NZ, so this is a cause that we are passionate about.

Cons:

  • It won’t lead to faster work visas. From all appearances, the new lower level accreditation requirements will mean that most accredited employers, if not all, will need to show that there is no residents or citizens available. This is in line with current requirements for most Essential Skills Work Visa requirements.
  • It may lead to slower work visas. If a business is not accredited by the time the changes are put in place, it will add an extra step to the process. Depending on how fast INZ is in processing those application, it could add months to what is already currently a very slow process. Need a new employee urgently? You may be waiting six months if you are not already accredited.
  • It will add an additional cost to employers. Currently the cost of applying for a work visa falls on the employee, as they are the one seeking the visa. Forced accreditation will now add a cost to the employer, as the accreditation process is unlikely to be free. What the cost will be, and whether you’ll need legal assistance, is still an unknown. However, for a small business, this could still be a significant cost in dollars and time that they currently don’t need to worry about.

Government reasoning

The reasoning provided is that this will help ensure (as taken from INZ’s release):

  • That migrant workers are only recruited for genuine labour shortages;
  • That regional and sector differences in the labour market are recognised when migrant workers are employed; and
  • That employers are encouraged to employ and train more New Zealanders.

There is no indication of how the planned changes help to ensure any of the above. Employers already talk about the difficulty in finding staff. For many employers, training New Zealanders is something that is either impossible (as you can’t train a lead staff member who has nobody supervising them, such as a Head Chef or Retail Manager) or has led to attempts to train staff that have failed. Many employers who come to us have advertised for staff and not had a single resident or citizen apply.

Work visa changes – Mid 2020

There is a simplification taking place in the middle of next year to replace six different work visas with one new work visa type. As a whole, this won’t change much for those affected, aside from simplifying what has become a cumbersome process. For employees it means that there will be less time spent trying to work out which visas they are eligible for.

The largest change, which seems to have gained little attention in the INZ release, is the removal of ANZSCO. The Australian and New Zealand Standard Classification of Occupations (ANZSCO) is currently used by INZ to show a list of tasks someone will do when working in a particular job.

The problems with ANZCO are threefold:

  • It over generalises jobs, leading to employers having to alter jobs to fit within ANZSCO rather than fitting a job in to what is best for their business. This leads to issues for staff in very small firms, where the role may cover several ANZSCO defined jobs, or very large firms, where some of the tasks may be undertaken by people as their only task.
  • It doesn’t allow for new and innovative roles and industries. The people who create ANZSCO, for example, don’t appear to understand the technology sector, requiring people to undertake tasks that have nothing to do with that role. Similarly, it wouldn’t allow for roles focused around areas such as social media, as ANZSCO has no category recognising that.
  • INZ have taken an approach of shifting ill-fitting jobs down in skill. If a job does not fit ANZSCO well, for the reasons alluded to earlier, the INZ approach is to then assume that the job must be low skilled and therefore automatically fit a lower role. For example, a client recently came to us because their role as a Sushi Chef (requiring years of training and experience) didn’t completely fit ANZCO’s definition of Chef as they were not “cooking” food. Instead, INZ had told them their job was actually a substantial match for a “Fast Food Cook” even though their job matched “Chef” almost perfectly and didn’t match “fast food cook” in any way. This had led to hours of work correcting INZ, as INZ do not show their rationale for how they matched the roles.

From mid-2020 ANZSCO will be gone. Skill will be based completely on the amount paid to the staff member. This is the most important change announced yesterday.

For employees it means not having to match their new employment offer to an antiquated set of job descriptions. For employers it means being able to create the job around the business’s needs, and not what ANZSCO and INZ believe a job should be about. It will also mean paying less money to your lawyer in having to argue these points with INZ (which we are ok with as it means we can spend that free time helping more clients).

Employers will also need to list the salary/wage in any advertisement for a role. It isn’t clear yet if it can be a pay scale range, or the actual pay that the employer is offering. This may discourage some employers from offering the job to non-residents and citizens and may discourage job applicants from negotiating a higher salary/wage. This is a major shift in approach to finding staff. Employers may use this as a way to indicate that work visa holders need not apply simply by not listing the salary in the advertisement, which will likely lead to a complaint to the Human Rights Commission for discrimination (whether or not it is will require some more thought).

Visas for family of low-paid workers

At present low-skilled workers, those on jobs that pay less than $21.25 per hour or pay less than $37.50 per hour but are listed as level 4 or 5 on INZ’s ANZSCO tiered list, are not eligible to bring their partner or children to New Zealand. From mid-2020 the partners of these visa holders will be able to be granted a visitor visa under their partnership, meaning they will be able to be in New Zealand but will be unable to work. Their dependent children will also be able to gain visas and, if they are of school age, they will be able to gain student visas and be deemed as domestic students. This means that they will be able to be educated in the same way, and at the same cost, as citizens, meaning free education. This will a great incentive to these visa holders, who are often undertaking jobs that cannot be filled locally.

This article covers the larger changes announced. However, there are many fine details and smaller changes that are being made. If you have any questions, or if we can assist with any immigration matter, please get in contact with us.

Arran Hunt
Partner