New Zealand is part of a global shortage of skilled workers. At the same time, there are thousands of skilled migrant contractors in the worldwide talent pool, that Kiwi employers can’t hire. Immigration law expert, Aaron Martin, believes an ideal solution to the issue would be to introduce a new visa category that enables skilled migrants to work as contractors not linked to a single employer.
Giving New Zealand flexibility to grow: a visa idea…
Aaron Martin of New Zealand Immigration Law understands “the nature of work is evolving with the constant changes in technology”. Employment is no longer as straightforward as it once was: fewer people are working for long durations with a single employer, and more people are taking up contracts that allow them flexibility with projects and clients, as well as places and times of work. The 9-5, Monday to Friday workweek is becoming less prevalent, and “agile” and remote working is becoming the norm.
Is it fair then, to expect our immigration policies to remain stagnant? The shift in work style is moving almost as rapidly as the advancement of technology. To get ahead, New Zealand is going to need a bit of help.
Both Martin and Lynn Crean, an IT-focused recruitment professional at Role recruitment, believe we need a new visa category to fit this new style of working. They believe a visa category for contractors would not only provide access to a wider range of skilled workers – allowing New Zealand to get up to speed in the digital arena – but offer better protection for migrant employees. They also emphasise a vast range of potential economic benefits for employers and New Zealand alike.
Benefits to New Zealand employers
A visa for contractors would bring several benefits for New Zealand employers. If employers were able to fill roles facing skill shortages with international candidates on a short-term contract there would be less admin, increased flexibility and choice, and, importantly, economic gains through value for money and future-proofing. Even companies interested in longer-term employees would see benefit, as this would, as Martin states “allow them to assess skill suitability and fit within the business before committing to a permanent hire.”
The ability to employ staff to suit the ebbs and flows of labour markets, or for projects that only require a short-term solution, is inarguably a huge benefit on its own. This goes for both low and high-skilled shortages, as the ability to hire for a specific project helps manage staffing costs associated with keeping up with these waves.
The nature of the visa would also mean getting more “bang-for-your-buck”. As Crean explains, contractors are hired on a higher rate, so they need to hit the ground running immediately. “This also means work gets done and deliverables and outcomes are easier to measure,” she says. “Companies can better manage their cashflow through controlling costs and working with the requirements of the business.”
Financially speaking, that’s not the only benefit. Being able to hire skilled migrants on a short-term basis, to either train existing staff or create innovative solutions and products (such as apps for large non-digital companies), is an effective way to keep up with global trends.
This is especially true in the arena of digital transformation, or “DX”. From a global point of view, New Zealand is seen as “quite open innovatively” but desperately behind when it comes to talent. Places such as Argentina, Ukraine, and the United Kingdom are streets ahead in terms of DX, and have adopted a heavy e-commerce economy. New Zealand talent simply can’t keep up with the skills and experience in these areas. Keeping up with these trends would keep us on the global playing field and allow us to work with the strong sense of innovation many New Zealanders value.
Digital transformation is global, and the skills New Zealand needs are also in high demand worldwide. This is potentially where the contractors’ visa would hold most value, as highly skilled candidates value flexibility. Martin explains that “employers would be able to connect with a wider professional network of candidates who want contract roles as opposed to permanent positions”, bringing huge amounts of opportunity to our country.
Benefits for migrants
Flexibility in terms of changing jobs isn’t just a benefit for migrants who have freedom of choice due to their sought-after skill set. It would also offer greater protection for migrants in compromising situations. Martin has previously discussed the overwhelming rate of exploitation against migrant workers in New Zealand. His belief is that a contractors’ visa could be a very effective solution to end this.
As discussed more deeply in his article All You Need to Know about Migrant Worker Rights in NZ, the same closed conditions that come with most visas to protect migrants are also making them extremely vulnerable. These conditions bind migrant workers to a specific employer, role, and location in order to hold a visa and live in the country. Unfortunately, the fear of being deported is being used by employers to manipulate workers, or is preventing them from reaching out. “The least free labour market place is in fact that of expatriate workers,” says Martin. “They cannot take their labour and move to another employer for better conditions or treatment because of the restrictions created by the immigration process.”
A free labour market is one that accommodates people who want flexible work arrangements in terms of hours, days, and locations. It is only natural to allow for more freedom for our valued migrant employees.
Benefits for New Zealand
You don’t have to look far to see that the nature of work is changing. More employees are benefiting from flexible places of work and times of work, and from not being held to one client or position. Contracting or freelancing is becoming more viable and popular among workers and employers. Globally, this freedom is quickly becoming the norm. Many companies, especially those that are larger or internationally recognised, are adopting this style of working. Going forward, it will be necessary to enable migrant workers to operate in a similar fashion, even if only to maintain a feeling of equality.
Many New Zealand companies are lagging in this area. As Crean explains, traditional business models, although still successful here, “would struggle to survive anywhere else in the world”. She uses e-commerce as a prime example. Amazon, the multibillion-dollar online marketplace, has viable competitors all over the world. “We have nothing even close to being structured like that logistically. Not even the niches.”
There’s no doubt that the ability to compete in the e-commerce sector would have a hugely positive impact for New Zealand’s economy. And we know that to get up to speed with other countries in this area we need to bring in talent who are already fluent in the industry. Short-term contracts could make for faster penetration of such markets – even if it these temporary hires were just to train existing staff or create strategies for moving forward. E-commerce is just one component of the digital era and Crean says New Zealand is “desperately behind”. We need to make some changes to keep up with the global rate of digital transformation and future-proof the country.
Martin understands why Immigration New Zealand (INZ) may have some concerns about the prospect of a contractors’ visa. It would mean there was no employer to hold accountable for breaches of immigration and labour laws. It would also increase the potential for non-residents to evade tax and leave the country. Martin believes, however, that introducing a short-term contractors visa would make INZ’s processes somewhat easier – if done correctly. The rules for a contractor worker visa would have to address these issues by stipulating that contracts have enforceable provisions.
- The rate of pay to be at market. This will require INZ have access to good information from the employer sector and professional bodies.
- As the visa holder would be a captured contractor, the contract’s provisions should mirror provisions relating to rest and breaks.
- Like all contractors, hours of work should be flexible – if a contractor wishes to work 60 hours or over weekends in order to finish the work and contract early, they should be able to do this. This will mean the visa holder can complete the work sooner. The visa conditions should stipulate that if the contract ends sooner, the visa also expires. This would be reinforced by the exiting provisions of the Immigration Act, which creates a deportation liability in the event the basis on which the visa was issued no longer exists.
And furthermore, in terms of tax:
- The conditions of the visa should also relate to tax compliance. Pay-day filing for contractors would assist in that regard, as would information sharing between Inland Revenue and INZ.
- Tax compliance should be reviewed as part of renewal processes or applications.
- Exit permissions could only be granted at the border if a tax certificate confirming compliance with tax payments was presented before boarding an outbound aircraft. Exit permissions of this type are not unusual.
To add further benefit, Crean believes that this visa category would help INZ pinpoint, define, and articulate the specific skill shortages and roles that need to be filled.
Martin and Crean believe that the benefits of a short-term contractors’ visa far outweigh the possible problems. The issues that may arise are likely to be easier dealt with than many of the problems we are facing now. Increased opportunities for New Zealand businesses, the chance to better protect migrant workers, and the considerable economic potential for the country as a whole, in Martin’s eyes, make this an easy decision.
If you’ve got questions about your visa, or would like to talk to Aaron, check out our migrant resources page here.