• Posted 17/09/2019 11:30pm

Upcoming changes to temporary work visas - some really positive changes

Following the public consultation which ran from December 2018 – March 2019, yesterday the government announced changes to the immigration rules for employers employing migrants. We know how critical and important migrants are to the success of the dairy industry and that these changes will affect almost all our dairy clients. We’ve summarized the key changes below but full details are available at www.immigration.govt.nz/work-visa-changes

In our view, on the whole, these changes are really positive for both employers and migrant workers in the dairy industry.   As you’d expect, however, the outcome isn’t perfect! These changes will happen in stages over the next 18 months and will be completed by 2021…

New Temporary Work Visa

The six current temporary work visa categories will be streamlined and replaced by one type of employer-assisted “temporary work visa”. The new temporary work visa will be introduced from 2021 and all existing work visas will remain valid when the new visa becomes available.

What hasn’t changed: the new temporary work visa will still have conditions specifying the employer, job and location and the visa holder will still need to get a variation of conditions to change any of these.

New employer-led visa application process

There will be a new “employer-led” process which will involve three stages. The biggest change here is that from 2021 employers wanting to employ migrants will need to be accredited. The details of what this will look like (process, cost, evidence which needs to be supplied) are still being worked through and due to be announced in March 2020. There are three accreditation categories. Most employers will fit within the “Standard Accreditation” category (employers hiring between 1-5 migrant workers per year). It appears that standard accreditation will initially be for 12 months and then 24 months on renewal.   

Replacing existing skill bands with a simple remuneration threshold aligned to the median wage

As most employers in the dairy industry will be painfully aware, immigration currently determine the skill level of a role using a combination of the Australian and New Zealand Standard Classification of Occupations (“ANZSCO”) occupation codes and pay rates. This hasn’t worked well for the dairy industry because ANZSCO occupation codes do not recognize a mid-skill level for dairy cattle farming. The result is that most dairy roles are deemed for immigration purposes “lower skilled” because the position responsibilities fall short of the ANZSCO requirements for higher skilled roles (which, for example, require the employee to be managing business capital including budgeting, taxation, debt and loan management). As a result, most work visas for dairy are currently being granted on the basis that the role is low skilled resulting in shorter visa duration (commonly one year) and a requirement to undertake a labour market test and liaise with the Ministry for Social Development (“MSD”). Lower skilled workers are also subject to the stand down period (see below).

The great news is that from mid-2020 ANZSCO will not be used to assign skill bands to roles. Instead, only the rate of pay will be relevant:

·      Jobs that pay at or above the median wage (currently $25 per hour or $52,000 per annum based on a 40 hour week; the NZ median wages is updated by Stats New Zealand at least annually) will be “high paid”; and

·      Jobs that pay below median wage will be “low paid”.

What hasn’t changed: employers will still need to be able to show that the rate of pay for the role is in line with market rates. Furthermore, the role will still need to be matched to an ANZSCO occupation code to enable immigration to assess (1) the rate of pay against market rates and (2) the suitability of the qualifications of the visa applicant.

High paid jobs

High paid jobs will receive the same benefits as jobs currently categorized as mid-high skilled (including a visa for up to 3 years and the opportunity to renew the visa thereafter). Furthermore, employers offering a high paid job outside the main centres (Auckland, Hamilton, Wellington, Christchurch and Dunedin) do not need to show they can meet the labour market test (which requires them to go through a process, including liaising with MSD, to show no New Zealanders are available for the role).

Low paid jobs

For low paid jobs, the labour market test needs to be satisfied before the employer may access migrant labour. This includes providing details of the role to MSD to see if any New Zealanders are available. Furthermore the employer will, in most cases, be required to accept a New Zealander referred by MSD for the role (the circumstances in which an employer can reject a person referred by MSD are still being worked through).

Recognising Variations in Labour Needs Across NZ

Another positive aspect of the new policy is that the differences in labour needs across the country will be recognized with the introduction of three different regions:

1.      City – identified as Auckland, Hamilton, Wellington, Christchurch and Dunedin.

2.      Higher supply region — this is a region with a variable or high number of people available for work and low unemployment or underemployment (identified as: Northland; Manawatu-Wanganui; Bay of Plenty; Gisborne and Hawke’s Bay; Taranaki; Tasman, Nelson, Marlborough and the West Coast; regional Wellington, including the Wairarapa); or

3.      Lower supply region — this is a region with low number of people available for work and high number of jobs available (identified as Waikato, Canterbury, Otago and Southland).

There will be different rules for these regions which recognize that regions with a low supply of labour, low unemployment and low underemployment need to be treated differently. Depending on the classification of the region (city, high supply region or lower supply region), the conditions of a migrant worker’s visa will be different. What’s great for dairy is that an employer in a lower supply region, who is employing a migrant in a low-paid role (provided they meet the requirements of the labour market test) will have access to visas which last for up to 3 years (currently most low skilled visas are granted for 12 months which is causing stress for both employers and employees who need to renew these visas annually at a significant financial and time cost).

More good news – low paid migrant’s families.

From mid-2020 low paid migrant workers will be able to support family visas enabling them to bring their family to New Zealand for the duration of their work visa. This reverses an unpopular 2017 change (viewed by many as a harsh restriction likely to make New Zealand less attractive to migrant workers in a globally competitive market for talent).

And last but not least: the stand down period

The new rules retain the requirement that low paid migrant workers will need to leave New Zealand after three years. If they want to return, they must spend at least 12 months out of New Zealand first before they apply for another work visa. This is commonly called the “stand-down period”.

The intention of this rule is to prevent a pool of low paid, lower skilled migrants building up in New Zealand who are well settled but have no long-term future here because they can’t apply for residence.

The stand down period is generally unpopular with both employers and migrant employees. Going forward, however, its impact will be tempered by other changes to the immigration rules. For example, using the rate of pay to assess the skill level of a role will bring more migrant workers within the high-paid category compared to the current rules which require ANSCO to be considered alongside pay rates. Migrant workers in the high-paid category are not subject to the stand-down requirement and may apply to renew their visa. 

Conclusion

The changes to the immigration rules are largely positive and address many of the biggest frustrations and barriers faced by both employers and migrants. It’s great to see some positive news for employers, particularly those in the dairy industry, at a challenging time.

Note that this article seeks to highlight the key changes and summarises the information from the government’s announcements. We are not providing immigration advice and you should contact a licensed immigration advisor for advice on your particular circumstances.

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