Work Visa Changes - How will they Affect You? Part 1: For Employers

Thursday 10 October 2019

Work Visa Changes - How will they Affect You?

Part 1:

For Employers

The Government has announced a number of changes affected employers who employ foreign workers.

The changes will introduce a new employer-led visa application process that includes the following:

1. Employer Check: employers will have to be accredited to hire a foreign worker.
2. Job Check: the job will be checked to ensure that no New Zealander is able to fill the job being recruited for, subject to skill, sectoral, and regional differentiation.
3. Worker Check: checks will be made to ensure that the worker is of good character and health.

Changes to the employer-assisted work visa system will not apply until 2021. However, some changes are applying immediately to Talent Accredited employers. Those are employers who have received accreditation under the talent accredited employer system. That system allows the employers to have the ability to offer work to residency opportunities to employees over a certain income. For those employers, the remuneration threshold for the work-to -residency visas will be increased to 150% of the NZ median income. This is currently $79,560 per annum.

Below will focus on the proposed Employer Check due to apply in 2021.

Accreditation for Employer Check

This will require all employers to be accredited in order to employ a foreign worker.

An employer will obtain accreditation based on one of the three pathways:

1. Standard accreditation: this applies for employers who employ between 1 & 5 employer-assisted foreign workers in a 12 month period. Such employers must have no recent history of regulatory non-compliance and must take steps to minimise exploitation. The initial accreditation will be for 12 months, and 2 years for any subsequent renewals.
2. High volume accreditation: this applies to employers who employ more than 5 employer assisted foreign workers in any 12 months. In addition to those the standards applicable to a standard accreditation, a high volume accredited employer must demonstrate a commitment to training and upskilling New Zealanders and a commitment to improving pay and conditions over time. The duration of accreditation is the same as that for the standard accreditation. 

3. Labour hire companies: these are companies which will be required to meet the same requirements as the high-volume accredited employers. In addition, there will be more robust verification and assurance and up-front assessments to ensure that commitments are being met. The labour hire companies must also demonstrate they will contract migrant labour to businesses which are compliant with immigration and employment law. They must have good systems in place to monitor employment and safety conditions on-site and have a history of contracts for the supply of labour and employing New Zealanders. They cannot be established only for the sole purpose of recruiting migrants. The duration of accreditation for these companies will only last for 12 months and must be renewed 12 monthly.

In summary,  standard accreditation has the lowest level of compliance requirements. Compliance requirements are increased with higher volume employers with labour hire companies being required to meet the most stringent requirements.

The compliance costs on smaller employers will be significant.

How much will this cost employers?

The cost of accreditation in the new visa system is still being worked through. Earlier indication suggests that standard employer accreditation could be around $1,500.

Can employers pass these costs onto employees?

Employers will be expected to meet the cost of recruiting foreign workers. If any employer decides to use an agent to help with the recruitment process, fees charged by the agent will need to be covered by the employer and not passed onto the respective foreign workers. The main focus of the accreditation is to ensure that non-compliant employers will not be given approved accreditation and will therefore be unable to recruit employer assisted foreign workers.

What can I do as an employer to prepare for the changes?

• You should review your employment agreement to ensure that they comply with New Zealand employment laws.
• You should also check that your records and pay system comply with NZ laws and record keeping requirements.
• You should also ensure that you are paying the market rate for your employees.

If you require any assistance, please contact us.

In the next article, we will cover the job check requirements.

Teresa Chan

7 October 2019

This article is for general use only. Advice should be sought for specific circumstances. Please consult Teresa Chan at Teresa Chan Law Limited, Level 3, Westpac Building, 106 George Street, Dunedin 9016, ph. 477 1069, or email teresa@tchanlaw.co.nz