Government’s new 6-point SMC criteria leaves NZ employers in the cold

In June 2023, the New Zealand Government announced the details of their highly anticipated new Skilled Migrant Category (SMC) visa.

From October 2023, the new, 6-point uncapped SMC visa will offer a pathway to residency for skilled migrants who meet the specific criteria in either their income, qualification, occupational registered skills, or New Zealand based work experience. 

Skilled migrants with a job offer in New Zealand must accumulate six points to qualify for the SMC to become New Zealand Residents. But what do these changes really mean for migrants and their New Zealand employers?

Overheated job market 

Despite an overheated job market and NZ employers calling for easier pathways for migrants to fill roles that onshore employees are not snapping up, the New Zealand government have again announced changes to an Immigration process that leaves employers out in the cold.

The income threshold for the new 6-point SMC visa states that for migrants to qualify for the maximum allocation of 6 points in this category, must be paid three times the median wage of NZ$88.98 per hour or approximately NZ$185,000 annually. Those on twice or 1.5 of the medium wage are allocated 4 – 3 points, respectively so will need to make up the additional point from work experience.

Similarly, migrants an occupation that requires registration or migrants who have a bachelor’s degree or higher can gain more points and are viewed more favourably. 

Tough threshold for employers 

People in roles where skills are developed primarily on the job, including trades without a registration requirement, are most likely to be detrimentally affected by removing points for qualifications below a bachelor’s degree.

Although this is balanced by introducing income as a stand-alone skill proxy, this could be a tough threshold for some employers to meet.

Plugging the gaps 

Many New Zealand employers need to plug gaps in their workforce, but in many cases, the vacant role is not highly skilled enough to be paid 1.5 times the median wage, meaning that despite the AEWV being extended from 3 years to five, many migrants will not be able to apply for residency when their Accredited Employer Work Visa expires.

Migrants who do not qualify for 6 points via the income, qualification or occupational registration criteria can boost their SMC point threshold via New Zealand based work experience. But yet again, if they have selected points from Income, they must be paid at least 1.5 times or 2 times over the duration of that experience to qualify for their 3 to 6 points.  

Median wage annual updates 

New Zealand’s median wage is updated annually, so for some it may create an ever increasing threshold that causes residence to be constantly put beyond their grasp. Unless they have an employer who can withstand the wage inflation. The question over the median wage is yet another example of a government immigration policy change that may easily catch out employers and their workers.

For our international work force this creates a greater challenge. Visa conditions tie them to employers. They cannot change roles without employers agreeing to make applications to Immigration New Zealand before they must apply to change jobs. So they are denied the ability to use a workers most effective bargaining tool – the ability to move to new employment with another employer offering better terms and conditions. 

Denied access to the ‘free labour market’ other workers enjoy, their ability to find better paying work to meet residence requirements and give them that opportunity is restricted and unnecessarily difficult.

More pressure added to employers 

Essentially, the government has added more pressure to struggling New Zealand businesses by expecting them to pay increasingly expensive wage bills that many employers simply cannot afford whilst also having to offer training and work experience to migrants who are not guaranteed to stay with their company once the SMC criteria have been met. 

This once again leaves New Zealand employers in the unenviable position of having wage inflation forced on their business by Government through immigration policy settings while also trying to attract and retain homegrown talent that simply isn’t there.

How NZIL can help 

NZIL is dedicated to supporting employers and migrant workers throughout the immigration process. If you require help or advice regarding the new SMC visa or anything Immigration related, contact our expert team.  

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