What are the most significant changes to the New Zealand immigration policy in 2020?

In September 2019, Immigration New Zealand announced a raft of changes to work visas and they re-opened the parent resident visa category.  Most of the new conditions will be introduced over 2020 – 2021.

The significant changes to NZ immigration policy are:

• A new employer assisted work visa is being introduced to replace six old temporary work visas.
• The level of pay attached to a job will be used to decide the skill level of the job which will in turn determine the duration of the visa.
• The ANZSCO publication will be abandoned as a measure for skill of a job.
• The labour market test for low-paid jobs with be strengthened.  Employers will need to prove there are no local workers suitable for the job before they can consider hiring anyone from overseas.
• Income thresholds under the Essential Skills work visa category are increasing. These changes will affect anyone applying for an essential skills visa from February 24, 2020.
• There will be open access for high-paid jobs in rural regions and lists in cities.  This means employers will not have to prove they have tried to find a local worker before recruiting migrants into such roles.
• The ability for lower-paid workers to bring their families to New Zealand will be reinstated.
• There will be a work to residence visa pathway for migrants in highly paid jobs.

Why would the Government change the skilled residence visa and work visa rules?

The government makes changes to rules to reflect movements in the labour market. The objective is to encourage migration in sectors experiencing skill shortages and to encourage permanent migration of those who are considered to be highly skilled.

Rules have been adjusted to encourage migrants to locate to provincial regions to assist the economic development of those regions. The government will treat job offers outside Auckland and the main centres differently.

The government can adjust the pay and salary bands that a migrant worker must be paid to be eligible for residency. This can be to help manage the number of applications.  It is also is used as a measure of the skill level of the job for a residence visa application. It also determines the duration of a work visa. The side benefit of these increases is to encourage increases in the wages offered to migrant workers and to ensure that the level of pay is kept in line with the current cost of living.

Why were the recent work visa changes made?

The changes to work visas aim to improve how New Zealand’s temporary workforce operates by ensuring that:

• migrant workers are only recruited for genuine jobs where the skills cannot be found in the local labour market
• regional and sector differences in the labour market are recognised and skilled migrants are being hired to address these
• employers are encouraged to employ and train more New Zealanders.
• ensure employers who hire migrant workers are good employers and treat staff well

What do these changes mean for immigrant workers?

If you are working in New Zealand on a temporary work visa your current visa is still valid until it expires.

From 2021, a new temporary work visa will replace six existing visas:

• Essential Skills Work Visa
• Essential Skills Work Visa — approved in principle
• Talent (Accredited Employer) Work Visa
• Long Term Skill Shortage List Work Visa
• Silver Fern Job Search Visa, and
• Silver Fern Practical Experience Visa.

At the same time two employer schemes will be removed:

• approval in principle (AIP) before an employer hires workers on an Essential Skills Work Visa
• accreditation as a Talent Accredited Employer.

Higher salary thresholds are being introduced, which will make it much harder for immigrants to secure a work visa, residence visa or parent visa.

What are the current rules for residence?

If you’re a skilled migrant but in a job paying less than $25.50 per hour, under current rules introduced to manage the impact of COVID-19, you are eligible for a 6-month Essential Skills work visa. You won’t qualify for residence with this level of pay, however.

If you are paid more than $25.50 per hour, you may obtain a 3-year Essential Skills work visa and possibly qualify for residence.

If you are seeking residence and want to claim points from your work experience, this has become a lot harder. It will be a challenge to document work experience in a manner that meets the new standards.

Changes to the length of a work visa also makes the path to residence more difficult. Those seeking work visas in roles paid less than $25.50 will be given 6-month visas, provided the employer can satisfy a labour market test. In January 2022, the old rule of 1-year visas will come back into force.

People paid less than $25.50 will only be able to get visas for a maximum of 3 years (unless they are a healthcare worker). At the end of that period, the applicant will need to leave the country for a full year before they can seek another visa for the same job. Alternatively, if they wish to remain in New Zealand, they will need to apply for work visa with a role that is paid at or above $25.50.

Visas will still have conditions specifying an employer, job and location, and a visa holder will still have to get a variation of conditions to change any of these, or apply for a new work visa if moving to another region to work in the same type of job or if moving to a completely new role.

Immigration New Zealand is also making employers work harder to prove there are no New Zealanders available for a job before granting an overseas worker a visa.  This is called a labour market test.

What are the new income thresholds for the work and residence visa?

The Income thresholds under the Essential Skills work visa category on increased on 24 February 2020.

The new remuneration thresholds are:

These changes will affect everyone who is reapplying for an Essential Skills work visa. Prior to February 24, you may have been classified as a mid-skilled worker, but now, if your pay packet does not meet the new income thresholds, you will be downgraded to the low-skilled category. This will affect your eligibility for an extended visa or residency. Read more about new work visa pay rates here.

What do these changes mean for employers who wish to hire an immigrant?

Firstly, the planned 2021 rule changes will be introducing an employer accreditation system that is mandatory.  All employers will need to be accredited before they can consider hiring migrant workers.

Employers seeking to support employees in work and residence applications will need to be prepared to increase salaries and wages, if they want to try and secure 3-year work visas for workers.

The new changes give a clear message to employers that they should pay people according to their value and not minimum wage or what they think they can get away with because the employee is dependent upon them for a visa.

The messages to employers are clear:

You need to create pathways to promotion and higher wages for staff you consider add value to your business. Otherwise, be prepared to replace that employee in three years.

You must comply with immigration rules and labour laws, or you won’t be allowed to support applications for work or residence visa.

You need to make sure you know the skill level of the job you are hiring for so you can establish what you will need to pay in order for a work visa and residence application to be successful.

Who is eligible for a parent residence visa?

This category was set for launch in February 2020 with new criteria. COVID put a stop to that. Immigration New Zealand are not accepting expressions of interest (EOIs). We are waiting for announcement from the Government when this category will be re-launched but we suspect this won’t be until after the border re-opens.

The proposed changes to the category included:

• limiting the number of people who can get the visa each year to 1000
• standardising the expression of interest process and removing the 2-tier system
• introducing new financial requirements for sponsors, which are updated every year based on the New Zealand median income
• asking sponsors to provide evidence of their annual income through Inland Revenue tax statements, and show they have met the income requirement for 2 out of the 3 years before the visa application is lodged
• removing the option to meet financial eligibility criteria through a parent’s guaranteed lifetime income or settlement funds.

To sponsor one parent on this visa, a sponsor’s income needs to be twice the annual median salary and have been at that level for two of the past three years. In order to sponsor two parents, the sponsor must earn three times the annual median salary.

These high thresholds mean many migrants will not meet the income criteria and will therefore not be eligible to sponsor parents.

Whether these criteria will be maintained when the category of application is re-launched remains to be seen. Watch this space.

Next thing coming?

The government is planning future changes, including visa criteria that allows 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.

There will be major penalties for directors and shareholders of employers who are found to have exploited migrant workers.

There will be more stringent expectations on employers to train and upskill local workers as part of being given permission to hire migrant workers.

There is an expectation that employers will increase wages for local workers if they seek to hire migrant workers.

If you’re looking for expert legal advice on your immigration status, employing migrant workers or what your pathway to residency is, speak to us. Contact the office to make an appointment to speak to our principal lawyer Aaron Martin.