Work Visa Changes - How will they Affect You? Part 2: Job Check

Tuesday 8 October 2019

Once an employer is accredited under the Employer Check system (refer to Part 1 of this article), the Job check will then assess whether the job is genuine, and has terms and conditions (including pay) that are consistent with NZ standards and that the employer has made a real attempt to recruit a New Zealander.

In this respect, this is not too dissimilar to the labour market test which most employers have to go through under the current Essential Skills work visa system.

The Job Check will also provide a new streamlined process for higher paid jobs, and to allow foreign works to fill jobs in parts of the country where there are few New Zealanders available. This will help to make it easier to fill vacancies in areas outside of the main centres.

The job check can be met in one of 3 ways:

1. The highly paid pathway: This applies to jobs which are paid at 200% of the median wage. Currently this is $50 per hour or $104,000 per annum based on a 40 hour week.
   
   Employers recruiting for these jobs will not be required to do a labour market test. Foreign workers recruited under this pathway will also be eligible to work towards permanent residency once they have worked in a “highly paid” job in New Zealand for two years.
    
2. Sector agreement pathway: Sector agreements will be negotiated with sectors that have a high reliance on temporary foreign workers, especially in lower paid occupations.
   
   The following sectors have been identified as those covered by this pathway: Residential care (including agreed residential care), meat processing, dairy, forestry, road freight transport, tourism, and hospitality. Construction, horticulture, and viticulture sectors are also potential candidates.
   
   Sector agreements will enable the government to agree a workforce plan with the sector and the conditions to be met for recruiting foreign works for that sector.
   
   This will reduce compliance costs and provide more certainty for employers in those sectors wishing to hire a foreign worker. In exchange, the sector will be required to make commitments towards longer term labour market improvements to reduce the sector’s reliance on temporary foreign workers over time.
   
   An employer within the sector must comply with the sector agreement unless the job is above the wage threshold in the highly paid pathway.
   
   Sector agreements will be negotiated two at a time, with the first two being for the residential care and the meat processing sectors.

3. Regionalised labour market pathway: this is the pathway which is most likely to be applicable to small to median size employers. This pathway will include a streamlined process for higher paid jobs and a labour market test for lower paid roles.

1. 1. Higher paid jobs: This applies to jobs that pay above the NZ median wage, which is currently $25 an hour. This effectively means that all employers recruiting for higher paid jobs in the regions will have open access to recruit foreign workers.
      
      Skill shortage lists will no longer be needed for each individual region. They will only exist for the five cities: Auckland, Hamilton, Wellington, Christchurch, and Dunedin.
      
      Removing the labour market test for all jobs paying above the median wage in the regions should make it easier for the regions to recruit higher skilled foreign workers.
2. 2. Lower Paid Jobs: These are jobs which pay below the median wage. For these jobs, there will be a requirement for the employer to advertise the job with pay rates and to check with MSD for suitable New Zealanders to do the work.
      
      Jobs in different regional labour markets will have different immigration settings. For example, in parts of the country with fewer New Zealanders available to work or wanting more work will enable foreign workers to obtain a visa of up to three years duration.
      
      Jobs in cities and regions with a higher supply of New Zealanders who are available will only enable foreign workers to be granted a one-year visa. Such foreign workers will be able to be granted a maximum of 3 one-year visas.
      
      After 3 years, the foreign worker will need to leave the country for at least 12 months. This is unless during the 3 years, the foreign worker is approved for a job that pays above the median wage.

Our observations

While it is encouraging to see that certain sectors will enter into sector agreements with the government which will reduce compliance costs, we will need to wait and see the specific details.

Many hospitality workers, especially in Dunedin, will fit in the lower paid category. If not covered by a sector agreement, those workers will have to renew their visas every year, and with a 12 month stand-down from NZ after 3 years. This is unless after 3 years their pay is increased beyond the median wage in New Zealand.

Even if a hospitality job in Dunedin pays above the median wage of $25 per hour, the job must still meet one of the requirements:

1. It is covered by a sector agreement,

2. It is on the skilled shortage list for Dunedin; or

3. It has to meet the labour market test.

In summary, there are still particular areas which need to be watched, especially those with a specific demand for foreign workers, such as the ethnic food industry. If not covered by a sector agreement, the gap in this industry in Dunedin may have to be filled by the students working part time, or students working on the post study work visa who will not be subject to the above requirements.

The next article will cover the Worker Check.

Teresa Chan

8 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