IMPACT – MEDIUM

What is the news? The Minister for Immigration has proposed significant changes to the employer-assisted temporary work visa system and has opened a public consultation, allowing the business community and other interested parties to submit their feedback. The public consultation period will end in March 2019, with the final proposal to be tendered to Cabinet in June 2019.

  • Implementation time frame: The proposed changes, along with firm implementation dates, have not been finalised. If the proposal survives the public consultation period and is subsequently approved by Cabinet, the Minister for Immigration anticipates an implementation schedule commencing in 2020. Some minor preliminary changes may occur at an earlier date, including:
    • The introduction of Regional Skills Shortages lists to replace the current Essential Skills in Demand lists.
    • Changes to remuneration thresholds.
  • Documents impacted: The changes will affect temporary work visa applications, including, but not limited to, the following visa types: Essential Skills Work visa, Talent (Accredited Employer) Work visa, and the Long Term Skill Shortage List Work visa. As part of a visa simplification process and to improve the quality and consistency of INZ decision-making, all employer-assisted work visas will be collapsed into a single visa option or pathway termed the ‘employer gateway’. It is not anticipated that the changes will affect the Specific Purpose Work visa.
  • Processing time impact: It is expected that the proposed changes will initially lengthen processing times for employers.
  • Business impact: Most significantly, businesses will need to satisfy new accreditation and labour market testing standards in order to process temporary work visa applications. This is likely to result in further exposure and assessment of business recruitment practices/decisions, and a requirement for greater investment in immigration compliance and record keeping.
  • What to watch: The Minister for Immigration will report back to Cabinet on (1) the outcome of the consultation period and any changes to the proposals, and (2) an implementation plan including the financial implications of the proposals.

Key proposals:

  • Businesses will be required to formally sponsor work visa applications and facilitate the application process on behalf of any foreign nationals they wish to employ, potentially including payment of relevant costs. The new framework is intended to be ‘employer-led rather than migrant-led’.
  • The labour market testing requirement will be strengthened, with concessions awarded to positions aligned with skill shortages in regional areas, or high-skilled positions with remuneration packages that are at least 150%, and in situations where the employer is not premium accredited, 200% of the medium income (i.e. NZ$78,000 and $101,046 respectively, based on a 40-hour week).
  • Businesses that rely on foreign nationals to perform low-skilled work may be required to take part in sector agreements, which incorporate employer conditions on use of approved foreign labour, and long-term strategies to incentivise allocating preference for jobs to New Zealanders.
  • The new gateway framework breaks down the visa application process into three phases required to obtain a temporary work visa:
  1. The employer gateway, where approval needs to be granted to an employer to hire a migrant. As part of this process, businesses will need to demonstrate that they incentivise training and upskilling of New Zealanders, that they put upwards pressure on wages and conditions, and that they meet minimum immigration and employment regulatory standards. It is expected that there will be three sponsorship types, including standard accreditation, labour hire company accreditation, and premium accreditation. The latter sponsorship type will receive higher benefits and concessions, including the capacity to support residence applications for visa holders earning more than NZD$78,000.
  2. The job gateway, where checks will be made to ensure that a New Zealander is not readily available to perform the nominated role (unless a concession applies).
  3. The migrant gateway, where the migrant’s health, character, licensing/registration (if applicable), and ability to satisfy the skill requirement will be assessed. While the employee’s salary and skill level will still be used to determine the visa term, existing salary bands may be adjusted. A further change will be the renewed capacity for low-skilled migrant workers to bring their partners and dependent children to New Zealand. While this is a positive development that will re-unite families, dependents will probably face some restrictions on access to work, which the government hopes will reinforce the temporary nature of the migrant’s visa status and will prevent foreign workers taking up low-skilled work on an unregulated basis.

Analysis & Comments: The proposed changes, if implemented, will have a significant impact on the New Zealand business community. The reform reflects similar regional and global shifts towards increased labour-market protections. Changes may reduce the capacity for established and compliant users of the skilled visa programs to make efficient and timely recruitment decisions. However, once the implementation phase is complete, the new framework should provide greater clarity to end-users regarding eligibility criteria, processing and evidentiary requirements, and INZ decision-making trends. This should have a positive effect on the efficiency of visa outcomes across the board. New streamlined processing arrangements for premium accredited sponsors may also assist in this regard.

Source: Deloitte LLP. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 1 New Street Square, London EC4A 3HQ, United Kingdom.