One door opens and another closes – border opening with a reset “twist”

In the last week or so a number of major announcements/changes have been announced or have come in under the radar that should be a positive signal to employers and HR managers that now is a good time to start recruiting global talent as the country is getting back to business.  However, it’s also eminently clear that the immigration system (and who can get in under it) is going to look radically different from prior to the pandemic and there are some challenges ahead for a number of sectors.

Latest border opening announcements

The latest border announcements have signalled the following in terms of when the border will reopen to certain international arrivals:

  • From 13 April – Australian citizens
  • From 1 May – visa waiver nationals
  • October – non visa waiver nationals

What we don’t know is whether the border will be open only for visa waiver nationals coming as visitors/tourists or whether it is also intended that all visa categories will be opened up for processing for visa waiver nationals, to facilitate arrivals from 1 May.  And, if INZ is to open up visa processing, when?

Given that the opening date for visa waiver nationals has been brought forward from July to May, we should also hopefully see the non visa waiver nationals date brought forward at some stage soon.  Watch this space!

Regardless of the answers to these specific questions, the signal is clear: the border is opening up, so now is the right time to start filling the international talent pipeline.

‘Light-touch’ Other Critical Worker border exception

From 14 March a new ‘lighter touch’ version of the ‘other critical worker’ border exception category has been brought into play.  This new category represents a significant lowering of the bar and means that employers can now be looking to bring in highly paid talent, without needing to demonstrate that the candidate has unique experience and technical or specialist skills that is not readily obtainable in New Zealand.  In essence, Immigration New Zealand (INZ) have introduced a simple “bright-line test” based on income (only).

The requirements for this exception are:

  • That the person is required to stay in New Zealand for more than 6 months to achieve their critical purpose; and
  • That they are in a role for which they will earn at least 1.5 times the median wage ($84,240 p.a. or $40.50 p/hr).

Although there are one or two fishhooks to be aware of, this border exception is effectively a relatively easy way to bring in long-term employees who are paid above the minimum salary thresholds.  Note here this border exception also applies to people seconded in by international companies for longer term projects, not just applicants holding Individual Employment Agreements.  The process remains substantially similar to the old border exception category – once an invitation to apply is issued, the applicant must then apply for a Critical Purpose Visitor Visa to enable them to travel to New Zealand.

But wait, there’s more.  If these applicants also earn more than $106,080 p.a. ($51 p/hr) they should also be eligible to apply for residence under the one-off 2021 Residence Visa, provided they can make their first entry to New Zealand and lodge that application before the category closes on 31 July 2022.

For those that earn above $84,240p.a., but less than $106,080 p.a. or cannot arrive before 31 July 2022, they will need to wait and see whether they are eligible under the new residence visa categories (Skilled Migrant Category and a potential replacement for the Talent – Accredited Employer – Work to Residence visa) once they are reopened later in the year.

Updates to the new Accredited Employer Work Visa system

INZ have also now released some further detail on the Accredited Employer Work Visa (AEWV) system due to go live on 4 July 2022.  As expected, there are a few changes to the proposed system in recognition of the Government’s “Immigration Rebalance” focus.

In the next few weeks we will release further articles on this topic, but in the meantime we summarise some key information below.

Minimum pay threshold

The median wage will increase from $27 p/hr to $27.76 p/hr on 4 July 2022, to time in with the introduction of the new system.  Employers will only be able to secure work visas for employees who are paid at least the new median wage of $27.76 p/hr (equivalent to $57,740.80 p.a., based on a 40 hour work week).

Currently, minimum wage thresholds have very narrow parameters in terms of what can be counted – in most cases, only base salary and some very limited allowances can be included.  INZ have indicated there will be greater flexibility in how they calculate whether a migrant meets the median wage threshold.

The Government is also currently considering whether there may be particular roles/industries where an exemption should be applied to the minimum pay threshold and/or where additional restrictions should apply.

Types of Accreditation

INZ have removed the requirement that high volume accredited employers (who wish to hire more than 5 migrant workers) must also pay at least 10% above minimum wage or be covered by a collective agreement – given that the median wage threshold applies to all applications.   This means that the requirements for high volume accreditation are now the same as those for standard accreditation, although high volume employers will pay higher application fees.

There will be additional accreditation requirements to be met for employers who are franchisees or who place AEWV holders with controlling third parties (known as ‘triangular employment’).  The application fees for becoming accredited are also substantially higher for these two types of employers.

Job Check (Labour Market Testing)

If the job is paid at least 200% of median wage ($115,481.60 p.a. or $55.52 p/hr) no advertising will be required.

For all other jobs paying below these thresholds, the advertising requirements will be the same, irrespective of the location or nature of the role.  This is quite a substantial departure from the earlier policy that was initially to be released in 2021.

A job check can cover multiple positions, provided that the job details are the same and are all covered by the same advertising and proposed employment agreement.

Application fees

The new system will result in a substantial increase in the financial burden that an employer needs to bear with respect to the visa process for hiring migrant workers, as set out in the table below:

StageFeeWho Pays?
AccreditationStandard - $740
High volume - $1,220
Triangular - $3,870
Franchisee - $1,980
Employer
Job Check$610Employer
Migrant CheckApplication fee - $540
Migrant Levy
Migrant

Implementation dates

DateStep
23 May 2022Employers able to apply for accreditation
20 June 2022 Accredited Employers can submit a Job Check
4 July 2022Migrants can apply for an AEWV (if Accreditation and Job Check stages are completed)

 

Applications for Essential Skills work visas can still be made up until 3 July 2022 without the need for the employer to be accredited and for roles where the rate of pay is below median wage.

The ‘Immigration Rebalance’ – winners and losers

These announcements, in combination, signal great news for employers who haven’t been able to look to the international labour market to plug gaps in their workforce for high end skill.  There is also a time-limited window (perhaps a loophole) where it is possible right now to secure border entry (and potential residence) for those applicants being paid at least 1.5 times the median wage ($84,240 p.a. or $40.50 p/hr) before things start to tighten up under the new regime from 4 July.

For employers who have historically relied on migrant labour for lower skilled/lower paid roles (i.e. those that sit below the new minimum wage threshold of $27.76 p/hr) there is a lot of pain still to come.  These employers will effectively not be able to access migrant workers, unless they hold visas that do not require the employer to be accredited (think: working holiday visa holders, student visa holders who can work up to 20 hours per week, post study work visa holders).

This is clearly where the ‘Immigration Rebalance’ is focused and has been signalled for a long time – at forcing employers to reduce their reliance on “long term” migrant workers for low paid, low skilled roles, unless they are utilising “transient” workforces (such as working holiday visa holders).  There appears to be no appetite to return to the days where migrants in these low skilled/low paid roles could qualify for work visas year after year, but have no way to qualify for residency.

Whilst we expect there may be some concessions to come in terms of relief from the median wage requirement (perhaps in industries like aged care), industries such as tourism, hospitality and retail are likely to find these new rules very challenging.  It is clear that the Government seems to be firm on the longer term benefits of deleveraging reliance on immigration for these industries.  In this sense, the deleveraging has already taken place, as the result of the prolonged border closure, so the expectation is now for companies to rebuild with little reliance on migrants.

What next?

Depending on the profile of migrant workers you typically employ, there will be steps you can take now to prepare for the new system and to take advantage of what opportunities exist to bring in migrant workers/secure longer term visas for migrant workers before the new system comes in July.

Our team of experts are ready and able to assist employers with their accreditation applications and more importantly, assessing what these changes mean for your organisation and what you can do to prepare.   Please feel free to get in touch with us to discuss the steps that are appropriate for your business.

Keep an eye out for more articles and seminars/webinars to follow with higher levels of detail in relation to these changes.  You can sign up for our newsletters here.

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