Immigration News

New work visa rules create uncertainty

Work Visa CHANGES CAUSE UNCERTAINTY FOR MIGRANTS

 

What is the implication of the new work visa rules for migrants?

Immigration Law expert Aaron Martin reviews the changes that the government has announced to the Employer assisted work visa and discusses the impact this will have for migrants.

Over the next 18 months, Immigration New Zealand will be making major changes to the way employers recruit migrants. Six of the different temporary work visa pathways will now be replaced with one.

Sounds simple? It’s not.

Immigration law practitioner Aaron Martin says the changes have created enormous uncertainty for current visa holders and those currently in the system. And, with scant details for how these changes will be operationalised, the situation is very much a game of ‘wait and see’.

“A lot of the disadvantages are simply that many people don’t know where they’re going to be in two years,” says Aaron. “It just adds to the uncertainty. It doesn’t make for a very settled life.”

New migrants are even more in the dark. Aaron says that the skill level requirements for visas may change, but currently nobody really knows because the Government “hasn’t invented the rules yet” and has just given a broad-brush description.

Aaron also says that the Immigration Minister’s claim that up to 30,000 businesses will benefit from the new changes is “ministerial spin” and seems a suspiciously convenient round figure. “The Government hasn’t even invented released the criteria immigration officers will apply, or operationalised the policy,” he says. “So how can they know how many people will benefit from it? You’ve got to treat this claim with suspicion when you consider that his government was elected on the basis of reducing migration.”

Arbitrary pay rates don’t reflect the value of a migrant worker

One major problem Aaron foresees with the changes is the issue of visa approval being tied to pay rates, regardless of factors such as location, revenue, and customer base. Wages reflect the negotiation between an employer and employee; they are not an answer to the question of how much skill is attached to the job.

Aaron says that using pay rates to assess skill level is “arbitrary, irrational nonsense”.

“The amount an employee is paid doesn’t necessarily reflect their overall contextual value to the business, which includes factors such as location of the business, size of customer base, cost structure of the business, and demand and supply of the skills within the local labour market.”

Aaron cites an example of a migrant who works as a manager of a restaurant in Westport. They may have far more contextual value to that business than, say, the manager of a restaurant in Auckland, simply because the context of the business operations is entirely different.

“A location with a limited customer base and potential cost restraints would struggle to find someone with the right talent and skills to ensure the business runs well,” he says. “Those factors make a person far more valuable to a role in Westport than to a role in Auckland, simply because Auckland has a far greater pool of employees and a bigger customer base. But you can bet the manager in Auckland will be paid more than the manager in Westport.”

Another example is the comparison between the wages of a hairdresser in Dunedin and a hairdresser in Mosgiel. Both might have the same skill level but depending on how many cents one is paid above or below the median wage, one might be considered high-skilled and the other low-skilled.

The impact of the new work visa on different industries

At present, it’s difficult to gauge just how different industries will be affected. For many, it will be a waiting game.

Nurses who were hoping to attain residency by being employed by a DHB that was accredited will now be out of luck if they’re not being paid $79,560 per annum.

Many employees across New Zealand who had an option of seeking employment with accredited employers and getting residence are now in the tricky position of hoping that Immigration New Zealand will assess their jobs as at least skill level 1-3 in order to get residency under the Skilled Migrant Category.

“Some of these people might fall into a hole depending on how Immigration New Zealand considers their jobs are skilled according to the residence points system,” says Aaron. “If you’re in a salary or wage bracket between $52,000 and $79,560, it’s doubtful whether you will have any pathway to residence at all.”

So, what’s the future looking like for migrants?

The impact on the migrant population could be “quite a blow”. Many people no longer have the option of trying to get employment with accredited employers unless they’re paid $79,560 per annum. It’s also unclear how an employer who can’t get accredited will be able to renew their workers’ visas, let alone secure the residence.

“My guess is that not even the bureaucrats know the answers,” says Aaron. “There are a lot of unanswered questions around this process and where it’s going to go.”

One thing Aaron does predict, however, is a reduction in those who can get residency. It is clear the Government wants to force a large number of people who had previously been gaining residence through the work-to-residence/residence-from-work programmes to utilise the Skilled Migrant Residence Category.

“I don’t think we will see a corresponding increase in the number of people able to get residency under the skilled migrant category,” says Aaron. “Applying for residence through that process is extremely uncertain, with a significant number of casualties when Immigration New Zealand decides the skill level of a person’s job – often it is assessed as a low-skilled work, despite the person having a work visa that says they are mid- skilled.”

Migrant employers are now expected to train up their local labour pool, but how realistic is this?

The expectation for employers to become ‘trainers’ of local unskilled applicants is problematic in itself – and could have major implications for New Zealand’s future. Aaron says the Government and Immigration New Zealand have “grossly overestimated” the volume of competent, willing people currently in the unemployment queue available for these job opportunities.

“Training those people to the level of skill of the migrant workers who are going to be forced out is going to take a lot longer than 2021,” he says. “The Labour Government may have just created a significant potential for a skill shortage that will impede economic growth. Under-supply in the labour market will hamper our ability to complete infrastructure and employers’ ability to grow and develop their businesses.”

What to do if you’re a migrant affected by these changes

Aaron says, don’t wait for the changes. “If you have the ability to get residency in any way, shape, or form, do it now.”

 

Key points for the work visa rule changes:

  1. Current Accredited Employers must pay their migrant employees a salary of $79,560 or greater for a 40-hour week if the employee is wishing to transition to residence through their Work to Residence. This is an increase from $55,000 per annum.
  2. Migrants currently holding a Work to Residence visa or who have applied for this visa before 7 October 2019 – and are on a salary of $55,000 – will not be affected. They can still apply for residence after holding this visa for 24 months with an accredited employer.
  3. After 2020, Immigration New Zealand will assess job offers based on pay rates compared with the median wage. Jobs paying less than $52,000 per annum for a 40-hour week will be regarded as ‘low-skilled work’.
  4. High-skilled workers will have to earn over 200% of the median wage – currently that would mean being paid $104,000 – to apply for residence after they have worked in New Zealand for two years.

Looking for more insights on the talent visa changes? read more in our article “how the talent skill visa will impact employers”

Looking for advice on your visa application?  Or, need help with your business to become an accredited employer? Contact the team at NZIL for support for your immigration application.