The new immigration challenge
Upcoming changes to immigration policy are set to have an impact on businesses that rely on recruiting migrant workers, says Rachael Mason. She outlines ways to ensure the system works for you.
For employers who have migrant workers within their existing workforce or who intend to supplement their workforce in future with migrant workers, recent and upcoming changes to New Zealand’s immigration policies could pose significant challenges.
The changes have had, and will continue to have, a wide-ranging impact across a broad range of industry sectors on a national scale making it potentially more difficult to recruit and retain key employees. However, for those employers in the Auckland region and/or in the hospitality, retail and service sectors, the changes are likely to be even more challenging.
The combination of changes means that many migrants in these sectors no longer have an easy pathway to residence, so many prospective migrants may think twice about securing roles where there is no visa or residence certainty.
Therefore, businesses that rely on recruiting migrant workers to supplement their workforce, particularly in these types of industries or in lower skilled positions, need to be aware that these immigration changes will have an impact on their ability to source and retain good staff in the future.
SKILLED MIGRANT CATEGORY CHANGES
Changes have been made to the Skilled Migrant Category (SMC) for residence in two main areas: significantly increasing the points total required to qualify, and tougher English language standards.
These changes mean that significant numbers of migrant workers already in New Zealand, including a number in skilled job roles, will no longer have a pathway to securing residence. Furthermore, for migrant workers whose employment is based in Auckland, the changes make it even more difficult to qualify for residency as these applicants are not able to claim the bonus points other similar applicants outside the Auckland region can.
The changes will also make New Zealand less attractive for prospective migrants currently offshore because, even with a job offer, they may not have a clear or guaranteed pathway to securing their long-term future here through gaining New Zealand residence.
POTENTIAL CHANGES TO WORK VISA CATEGORIES
In addition to the SMC changes, the Minister of Immigration, Hon Michael Woodhouse, has signalled that there will also be changes to the work visa policy in the near future.
It is possible that these changes will amount to a recalibration of the work visa policy, most likely in relation to “lower skilled” job roles—covering job roles across all industry sectors that are classified at skill levels 4 and 5 on the Australian and New Zealand Standard Classification of Occupations (ANZSCO). Examples of job roles at skill levels 4 and 5 include: hospitality and tourism workers below manager level, customer service roles, lower level semi trade roles (eg, hammer hands, machine operators, general labourers), retail assistants below manager level, etc.
It is anticipated that it will be more difficult to secure work visas for migrant workers who are engaged in these lower-skilled job roles, for occupations across all industry sectors. We also expect an increase in the number of work visa applications being declined as a result of the application of tougher labour market testing requirements, with an associated increase in expectation on employers to train and upskill young New Zealand citizens and residents for these and other types of entry-level positions.
MAKING THE SYSTEM WORK FOR YOU
With good planning it is still possible to effectively use immigration as a way to supplement your workforce. In a number of cases, although not all, it should also be possible to enable a pathway to residence for migrant worker employees, despite some of these changes.
The following points should be considered:
- •Employers will need to provide comprehensive information to Immigration New Zealand (INZ) confirming that all aspects of the work visa policy, such as demonstrating genuine attempts to recruit from the resident labour market, have been met;
- •Taking a long-term approach to working with employees, including identifying and planning a pathway at the earliest stage to position them as eligible for residence over a period of time;
- •Using your investment in the employee’s pathway to residence as a possible retention tool;
- •Looking at alternative residence visa categories that may be able to be utilised (eg, Employer Accreditation—see below). Reviewing the employee’s wider family unit and personal circumstances to determine whether it is possible to secure a work or residence visa through other means;
- •Having an open mind to utilising student visa holders (with visa conditions allowing part time work rights) or working holiday visa holders on a “rotational” basis to fill positions.
The Employer Accreditation scheme provides an excellent opportunity for employers to meet their recruitment and retention requirements, while also offering migrant worker employees a residence pathway: a win/win situation.
For those organisations who gain Accredited Employer status, their employees can apply for Work to Residence visas setting them on a pathway to residency, provided the following apply:
- •The applicant is less than 55 years old;
- •Has a job offer for full-time employment of at least 30 hours per week, for permanent employment or a fixed duration of at least 24 months;
- •Has a minimum base salary of at least $55,000pa (based on a 40 hour week, not including overtime or other allowances);
- •Is being paid at the prevailing market rate applicable to the particular role; and
- •The other relevant policy criteria, including health and character requirement, are met.
Upon completing two years working in New Zealand under this visa category, your employee will then be eligible to apply for residence.
For some employers, it may seem that on the face of it the Employer Accreditation scheme may not support your business needs or fit with your current operating/remuneration model. However, it should not be immediately discounted, as in many cases with minor tweaks to your systems and processes it can be used effectively to meet your recruitment and retention needs.
For example, it may be that your migrant worker employees may not earn sufficient income to meet the $55,000pa requirement. However, in some instances it is possible to restructure an employee’s remuneration package in order to ensure the minimum base salary requirement is met. As an indication, based on a 40 hour work week, an hourly rate of $26.50 would be sufficient to meet the criteria.
The key advantages of being an Accredited Employer are:
- •Less documentation required for visa applications (ie, no need to advertise the role and advise why no New Zealanders are available for it);
- •Lower standard of English language ability (for residency) than other categories;
- •Much faster processing timeframes;
- •Relative freedom to choose who you want to employ, not what INZ will allow;
- •Competitive advantage over those employers who are not accredited—as your employees have a pathway to residence that they may not have with your competitors;
- •Perception of potential employees that Accredited Employers are a more elite employer, making your business more attractive when compared with unaccredited competitors; and
- •Perception of migrant workers that it is difficult to change visa type once they are here under the Work to Residence Category, and therefore assisting with retention.
It is important to note that INZ has signalled potential changes to the Employer Accreditation route. Employers who wish to consider this route are therefore advised to lodge their applications as soon as possible to take advantage of the current policy, prior to any changes coming into effect.
Employers take note: major immigration compliance changes coming in on 1 April
Immigration New Zealand (INZ) has announced the implementation of a tough new policy that has the potential to have a significant operational impact across a range of New Zealand employers. From 1 April employers who have incurred an employment standards-related penalty will be banned from recruiting migrant labour for a defined stand-down period ranging from six months to two years, depending on the severity of the case.
These standards-related penalties extend from formal infringement notices issued by the Labour Inspectorate (following a Labour Inspectorate investigation), through to penalties issued by the Employment Relations Authority or the Employment Court, to a declaration of breach or banning order issued by the Employment Court. Importantly, and of significant note for employers, penalties as a result of private actions taken by employees either through the Employment Relations Authority or the Employment Court will also be included.
While INZ has confirmed that the threshold for non-compliance will not include employers at the very minor end of breaches (including those who have entered into an enforceable undertaking with the Labour Inspectorate), the implementation of this new policy covering standards-related penalties will create a significant operational risk to employers; particularly those who have a large portion of their workforce on work visas or those who rely heavily on migrant labour to supplement their New Zealand workforce. That is because not only will non-compliant employers be stood down from hiring new migrants during the specified stand-down period, existing employees of that employer on work visas will not be able to secure an extension of their work visa if the visa expires during the stand-down period, so those employers stand to lose existing employees as well.
INZ have advised that they will publish guidelines and criteria to ensure that stand-down periods are applied fairly, consistently and transparently, but our view is that the policy will be very difficult to manage. That is because the only way to apply the policy fairly and with consistency would be to create strict liability, where mitigating factors either for cause or addressing the issue to prevent repeat non–compliance would not be taken into consideration as they are too subjective.
What seems to be proposed here is a formidable heavy stick that could have a significant impact on many good employers where a breach has occurred by mere human error.
As a starting point, we recommend that employers undertake a review of their internal systems and processes for managing immigration compliance, across the areas of: recruitment, capturing and storing evidence of employees’ right to work in New Zealand, managing compliance issues triggered by changes to terms and conditions of employment, and tracking of visa expiry dates.