Work Visas on the Move (Again)

Just before Christmas (possibly strategic timing in light of criticism he faced in the last few months) the Minister of Immigration announced a scheme to overhaul the entire employer assisted Work Visa system.  The proposals are set out in a detailed Consultation Paper, and I am currently involved with a couple of industry groups which plan to make submissions on this by mid-March.  Apparently the aim is to roll out the final form of the policy in the middle of 2020, which is – what a surprise – just before the next Election.

The New Model

A central feature is that all employers wishing to hire migrants must get one of three types of accreditation.  The category already exists as a subset of Work Visa policy, and is described in one of our fact sheets.  Under the current settings, employers must show that they:

  • are in a sound financial position;
  • have robust HR policies to safeguard employees;
  • have a clean employment relations record (for instance, no adverse claims against them before the Employment Relations Authority); and
  • are actively committed to employing and training New Zealand workers.

Whether accreditation under the new policy will look much different is not clear, although it is likely to carry over many of the above requirements into a new scheme.

Once accredited, employers can support applications for visas relatively easily.  This might give greater certainty to employers who get it.  There are, however, a couple of immediate risks with this idea:

  • Businesses wanting to hire only 1 or 2 people will face a disproportionate load of paperwork.  From our experience, seeking accreditation is a serious exercise.  The standards currently applied to accreditation set a high bar for employers in terms of HR policies and the expectation that they will continue to actively recruit and train New Zealanders.
  • Accreditation must apparently be renewed every 12 months.  There could be real problems for employers if Immigration is slow to decide applications for renewal, because if the existing certificate lapses before a new one is issued, the migrant staff have to stop working.  Just a couple of years ago the whole accreditation scheme was almost dysfunctional, until the duration of the grant was increased from 1 to 2 years in 2017.

A class of premium accreditation will be available, requiring an employer to demonstrate “pastoral care, active engagement in workforce programmes and endorsement by third parties [i.e., unions].”  The successful business can renew for 2 years at a time.  Again, though, this does not compare favourably with the present settings which allow existing accredited employers who appear to be reliable in the long run to extend their certification for 5 years at a time.

Another new element is the concept of “sector agreements” with particular industries for hiring in lower-skilled occupations.  Business groups such as the EMA and Restaurant Association will need to invest even more in research and professional lobbying to secure an agreement benefiting their membership.  The consultation paper suggests:

It is proposed that negotiations begin with the residential aged care sector and the tourism and hospitality sector in mid-2019 with the expectation that the agreements could come into effect by early 2020.

Winning the War on Exploitation?

Underpinning these and other ideas floated in the plan are the Government’s stated commitment to raise wages and to combat exploitation of migrant labour.  The latter issue has received some additional attention and funding in the last couple of years, but recently the news has been full of stories suggesting that it continues unchecked.  A new study gives some empirical backbone to the stories.  Nor is it limited to fly-by-night employers in back streets – major construction firms are also being accused of breaching employment standards on a large scale.

Vetting employers more stringently for employer-specific Work Visas is not necessarily going to curb exploitation.  Instead, it is going to shift it underground.  The reason is that in late 2018 the rules for Post-Study Work Visas were relaxed to allow graduates to more easily get open visas (that is, they can work anywhere, for anyone).  If accreditation makes it too hard for small businesses in particular to hire overseas staff, they will simply turn to the migrant student population whom they can engage on whatever terms they can achieve.

“Kiwis First” Again

An interesting feature of the proposal is the claim that part of the problem which it is meant to solve is the displacement of New Zealanders from employment.  In support, the paper cites an MBIE report updated in 2018.  The odd thing is that, overall, the researchers conclude that there are:

no significant indications of migrants crowding out New Zealanders for jobs, and, in particular, no overall effects on employment in the same industry (direct effects) or in other industries (combined effects) . . .

Indeed, elsewhere they declare that migration has had positive effects on wages, and the hiring of youth and beneficiaries in urban areas.  True, the report goes on to note negative effects on the hiring of New Zealanders through the current Essential Skills policy (the main employer-assisted route at present).  However, given that the employer-assisted categories only account for under 50,000 of the 230,000 or so Work Visas granted in the year to June 2018, and that the authors of the report could not be definitive about the reason for their findings, it is questionable whether this complete revamp of the policy can be justified for this reason either.

Finally, the Government wants to tune the migrant labour supply to match the needs of the regions.  No doubt there is merit in this, but any such system should also recognise that median wages differ widely across the country.  Employers should not be forced to pay Auckland prices for a worker in Southland.

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About Simon Laurent, Lawyer

Principal of LaurentLaw Barristers & Solicitors. NZ immigration law specialist.
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