Summary of recent changes to New Zealand’s immigration laws
Increasing challenges for employees’ residence applications
Employees’ residence applications, under the popular points-based scheme (called the Skilled Migrant Category) continue to be challenging because of increased pay rates and the difficulty in identifying the correct occupation code.
Pay rate – residence applications
The minimum hourly pay-rate increased twice this year. As of the 26 November the rate is $25/hour and it is likely to continue to increase next year. Therefore, employees with annual salaries close to $52,000 could be adversely affected if their employment agreements allow them to work more than 40 hours a week. Most employment agreements do provide for the employee to work more than 40 hours per week. Therefore, if an employee is earning a salary of $52,000, but occasionally works more than 40 hours in a week, this would mean the hourly rate would drop below the prescribed minimum.
Occupational codes – residence applications
Claiming the correct occupation code is now even more important in residence applications, if the hourly rate is less than $37.50. Often employees choose the wrong occupation code, when looking for one that matches their job, which results in their application being declined.
As the cost of each application is $3,240 it is wise to seek expert advice before incurring the expense.
Increasing challenges for employees’ work visa applications
Employees’ work visa applications, under the main Essential Skills scheme also continue to be challenging because of increased pay rates and the difficulty in identifying the correct occupation code.
Pay rate – work visas
The hourly pay-rate, to enable the grant of a three year work visa, has also increased twice this year. As of 26 November, it is $21.25 per hour. It is likely that the minimum rate will continue to increase next year. The hourly pay rate allows you to obtain a work visa, whereas the higher rate of $25 is required for residence.
Occupational codes – work visas
Again, choosing the correct occupation code is crucial. If an employee chooses the wrong code or the application is not adequately prepared to prove the chosen code is correct, the employee may only be granted a 12-month work visa and be unable to bring family to New Zealand. The employee will also only be able to work for a maximum of three years, and will incur the cost of renewing the visa every 12 months during those three years. Choosing the right code is important if the employee wishes to obtain residence in the future.
Therefore, informed discussions about occupation descriptions and remuneration need to occur well before submitting any visa applications.
Substantially increased visa application fees
Visa application fees have increased significantly. For example, to obtain a standard (essential skills) work visa for an employee, the application fee has increased from $298 to $495 (an increase of over 66%). It is, therefore, important to get the application right, first time.
Employer accreditation now granted for a longer period
Employer accreditation is now being issued for two years, in most cases, instead of 12 months.
Accreditation is a great tool for employers who recruit migrants earning at least $55,000 per annum, for a 40-hour week. For example, accreditation avoids the need to precisely identify the correct occupation code for a work visa or residence. Accreditation also helps employees progress to residence much more easily and cheaply.
However, Immigration New Zealand will enforce a greater standard of compliance going forward. Employers need to ensure that they have effective systems to adhere to both visa expiry dates and also visa conditions. Otherwise, they may lose their accreditation and thereby the ability to recruit employees.
If your business is not accredited and you employ migrant workers, we recommend that you consider obtaining accreditation. If your business is accredited, it is equally important to ensure you are meeting all of the accreditation obligations and have the evidence to prove it. This is a status you do not want to lose.
Compulsory stand-downs for inadvertent breaches of employment law
In February, Immigration New Zealand introduced a compulsory stand-down period for employers found to be in breach of employment law.
If an employer receives an infringement notice from a labour inspector or a penalty in the Employment Relations Authority it cannot support any employee visa applications for at least six months, including visa renewal applications from existing employees. This has prevented several employers, over the course of this year, from renewing employee visas and caused them significant costs. In these circumstances, the employee would have to return to their home country, unless the employee gets a visa through a job offer by a compliant employer.
It is very important to ensure that your HR systems, payroll and employment contracts are compliant, especially if you have migrant employees.
Substantial changes to post-study open work visas
Immigration New Zealand has overhauled how it grants work visas to overseas students who obtain a qualification here.
Overseas students who complete a degree can now obtain three-year work visas, which allow them to work for any employer. Students who obtain a lower qualification will be eligible for shorter, but also open, work visas. There are transitional arrangements for current students.
Employers do not need to complete Employer Supplementary Forms for their employees to obtain these post-graduate visas.
However, an employer may still need to provide some form of support to retain an employee longer term, such as completing an Employer Supplementary Form for a residence visa application. Given the increased challenges with work and residence visa applications, it is important that employers and employees plan residence or work visa applications well in advance of work visa expiry dates.
Increased difficulty for migrant employees wanting to buy homes
The Overseas Investment Amendment Bill came into effect on 22 October 2018. This makes it more difficult for many migrants to buy a home in New Zealand.
Migrant employees who obtain residence and have completed at least 183 days inside New Zealand, in the year before they buy their home, will not be affected.
However, employees on temporary work visas, or those who have recently arrived into New Zealand may need to obtain permission from the Overseas Investment Office before they can buy a home.
If the employee is buying a house to be his or her main home, an application to the Overseas Investment Office may be approved. It is important that your employee gets legal advice before signing a contract, or at least make the contract subject to Overseas Investment Act consent.