On the 19^th of December 2019, Ian Lees Galloway announced an increase to the remuneration thresholds for the work and residence visa. This is yet another hurdle placed in front of hard-working migrants who are seeking to make a long-term commitment to New Zealand.

Come 24 February 2020, migrants whose pay packet is not at the required threshold will either end up with a 1-year work visa (as opposed to 3-year visa) or be rendered ineligible for residence.

Imagine a stonemason on an essential skills work visa who earns $21.25 per hour. On 23 February their job would be classified as mid-skilled and they would be granted a 3-year work visa. One day later their job will be classified as low-skilled because of their pay rate.

Or, imagine a carpenter who earns $25 per hour and is seeking a residence visa. On 23 February they are eligible for residence; on 24 February they won’t be.

To still qualify for a visa under the new thresholds, these migrants on the cusp will need a pay increase of 2%. This may seem like only a small increase. But for an employer, a pay increase is not a quick and easy decision. Incremental increases can add up to make it unfeasible to employ a migrant.

Pay rate is a factor outside the control of most migrants. These threshold changes disempower them from being able to secure a visa on a long-term basis with a view to making a commitment to our country.

Implications for the aged-care industry

Immigrants on visas make up a third of New Zealand’s 22,000 aged-care caregivers and 5000 nurses.

Recently the government granted a small window to the aged-care sector reclassifying some of their jobs as skilled employment. Workers in the industry have also fought hard to get wages up to the $25 an hour benchmark for residence eligibility.

This move will set the sector back again.

Many migrant nurses and caregivers must now be reconsidering whether to stay in New Zealand.

This industry sector performs the vitally important role of looking after our elderly, and cannot attract enough locals to do the work. Such a backward step isn’t going to endear people to vote for the current government again.

Why now?
Employers in many industries say they would struggle without a supply of overseas workers.

The immigration system automatically adjusts wage levels as a result of annual review. But continually placing the goal of residence out of reach leaves people disheartened and wondering whether there are greener fields elsewhere. In a globally competitive market for skills, New Zealand runs the risk of losing to the competition.

Our migrant workers deserve better. Our immigration system is already under pressure from a large number of applications, and New Zealand is looking like an uncertain place to get residency. This will –  and already does – have an impact on our economy, especially for the many industries that have a skill and labour shortage that relies on migrant workers to function.

New work visa pay rates as of 24 February 2020

The new thresholds are based on the New Zealand median salary and wage rate of $25.50 per hour (up 2% from last year), equivalent to $53,040 per annum for a 40 hour per week job.

Skilled Migrant Category

1. The threshold for gaining skilled employment points will change from $25.00 to $25.50 per hour for jobs at ANZSCO skill level 1,2, or 3, and jobs at skill level 4 or 5 that are included at Appendix 7 of the operational manual.
2. The threshold for gaining skilled employment points will be $38.25 per hour for jobs at ANZSCO skill level 4 or 5 that are not included at Appendix 7 of the operational manual.
3. The threshold for bonus points for high remuneration will be $51 per hour.

 Essential Skills Visa

1. The threshold for mid-skilled employment will change from $21.25 to $21.68 per hour for jobs at ANZSCO skill level 1,2, or 3.
2. The threshold for mid-skilled employment will be $25.50 per hour for jobs at ANZSCO skill level 4 or 5 in Appendix 7 (This visa was treated as an exception due to changes made at the end of October.)
3. The threshold for higher-skilled employment for all other skill level 4 and 5 roles will change from $ 37.50 to $38.25 per hour.

If you have any questions about these changes and where they leave you, please do not hesitate to contact the office either through our website, or by emailing questions@nzil.co.nz, or calling +64 (0) 9 869 2952.