Is there still hope of working in New Zealand and applying for residence? What do this week’s new work visa rules mean?

What are the main policy changes?

Work visa duration will depend on pay

• Applicants earning at or above the median wage of NZ$25.5 per hour can be granted an Essential Skills Work Visa for up to 3 years.
• Applicants earning below the median wage of NZ$25.5 per hour can only be granted an Essential Skills Work Visa for 6 months, and consultation with Work and Income (WINZ) is required.
• Employer accreditation will take effect in June 2021.

{ad}

Please note:

These changes apply to all work visas requiring employer sponsorship. Open work visas are unaffected.

The pay thresholds for work visas will be reviewed annually, based on the statistics agency’s research into the median wage across New Zealand’s population. 

Why are these changes being made?

On 23 July, Immigration New Zealand staff and policymakers jointly held a meeting to explain these policy changes. I attended that meeting. Here, I explain in detail the government’s aims and the possible future effects.

Immigration New Zealand confirmed that the changes have three objectives:

1. To ensure employers first try to hire New Zealanders.

2. If employers want to hire non-New Zealanders, their pay should be at or above the median wage in New Zealand’s labour market.

3. If employers cannot find suitable New Zealand employees and cannot offer pay at or above the New Zealand median wage, they will need to recruit and replace employees more frequently. This is why work visas for lower-paid jobs have been shortened to 6 months. 

How will the changes affect employers and employees?

• Policymakers explained that the new policy of linking work visa duration to pay is deliberate: its purpose is to reduce New Zealand employers’ hiring of non-New Zealanders. This direction means overseas workers will find it difficult to obtain work visas in future.
• Employer accreditation requirements, under which employers must first be accredited by Immigration New Zealand before sponsoring prospective employees for work visas, are expected to take effect in mid-2021.
• If an employee has already obtained a work visa before the employer accreditation requirements take effect, that visa will remain valid.
• Employers do not need accreditation if their employees hold open work visas.
• Employers meeting the requirements can still sponsor residence applications for employees holding work visas. The current proposal requires those employees to earn 2 times New Zealand’s median wage.

Conclusion

These work visa changes may appear to concern only individuals’ interests, but they will have serious economic effects. Shortening work visas for employees earning below NZ$25.50 per hour is very likely to cause a serious decline in productivity.

• Having to renew work visas every 6 months will create additional delays.
• Employers hiring new staff need time to train them.
• Production costs will increase.
• Staff stability will decline.
• New Zealand will become less attractive to workers in industries paying below the threshold of NZ$50 per hour.

All these consequences will increase production costs in major industries, with many small and medium-sized businesses bearing the burden. For consumers, the most obvious effect will be rising house prices.

New Zealand is currently regarded as a safe haven from COVID-19. Over time, however, increasing numbers of work visa holders will leave while New Zealand’s borders remain closed. This will reduce the available workforce, and businesses with low profit margins will close as a result.

So, will there be further policy changes after the election in September 2020? That is an intriguing prospect.