What are the implications of the new visa changes for immigrants and employers?
The changes to the Skilled Migrant points system and work visa rules announced in April 2017 have now been implemented.
*Editors note: this article was originally Published In September 2017, since then Immigration NZ have amended the visa pay thresholds twice more. Therefore, we have updated the figures in this article to reflect the figures as of the 26th of November 2018.
The most fundamental changes are:
- Salary bands have been introduced as a surrogate for assessment of skill
- The only work experience that will now be recognised in a residence case is that which is also assessed as skilled.
Why are these changes being made?
One of the key drivers is that the current government does not think international students who only do level 4-6 qualifications and then end up in the retail and hospitality sectors add value to the New Zealand economy. Recent amendments and debates about immigration indicate that the government believes there are New Zealanders available to work in these sectors and that immigrants should not be hired instead.
What do these changes mean for immigrants?
Salary band thresholds make it much harder for immigrants to meet the criteria. If you are a skilled migrant but you are in a job paying less than $21.25 per hour for a skill level 1-3 role, think twice about trying to apply for an Essential Skills work visa.. And, if you are getting paid less than $25, forget trying to apply for permanent residence.
If you’re seeking residence, claiming points from your work experience has also become a lot harder. Most of my clients find it a challenge to document their work experience in a manner that meets the new standards. The kinds of job descriptions that were previously used in order to create successful visa applications will probably no longer be adequate to prove that past work experience is skilled.
Changes to the length of a work visa also make the path to residence more difficult. Those seeking work visas in lower-skilled roles will be given yearly visas (provided the employer can satisfy a labour market test) but only up to a maximum of 3 years. At the end of that period the applicant will need to leave the country for a full year before again seeking a visa for the same job. Alternatively, if they wish to remain in New Zealand, they will need to apply for a work visa for a higher-skilled role.
What do these changes mean for employers who wish to hire an immigrant?
Employers seeking to support employees in work and residence applications will need to be prepared to increase salaries and wages.
The salary bands differ between the two types of visas. Essentially, the lower-skilled the job the higher the hourly rate needs to be for a person to be able to transition to residence with the same role.
The payment at or above the salary band will be a condition of the work and in some cases the residence visa.
The new changes give a clear message to employers that they should be paying people according to their value and not simply paying bare minimum wage or what they think they can get away with because the employee is dependent upon them for a residence application.
The new legislation also introduces an employer compliance regime. If an employer supporting a visa application fails to pay the applicant at the required level or tries to find smart ways around it, further visa applications from that employer may be declined and they may be prohibited from supporting work visa applications.
Another vexing issue for employers is the use of the ANZSCO classification.
The ANZSCO is a database of occupation descriptions. The descriptions are then categorised into one of five skill levels. Immigration New Zealand (INZ) will refer to the job description when trying to assess your employee’s job.
Each ANZSCO description lists the tasks involved in each occupation. It is this list that INZ compares against an employee’s job description.
Many employers have failed to meet the challenge of trying to prove (by paper work) that an employee’s job substantially matches a statistical description of the role. This has resulted in the failure of many a potential migrant’s residence application. Now that challenge has also been imposed on residence applicants under the guise of proving “consistency” with the ANZSCO description for their prior work experience.
The messages to employers are clear:
- Create pathways to promotion and higher wages for staff you consider add value to your business. Otherwise be prepared to replace that employee in 3 years.
- Comply with immigration rules and labour laws, or you won’t be allowed to support applications for work or residence visa.
- Make sure you know the skill level of the job you are hiring for so you can establish what you will need to pay for the work visa and residence application to be successful.
Next thing coming?
Future planned changes include visa criteria allowing an officer to enforce diversity in the workplace. This will have a major impact on employers of any ethnic heritage whose employees are predominantly made up of members from their own community.
If you’re looking for expert legal advice on your immigration status and pathway to residency speak to us.