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Temporary work visa changes announced

29 November 2019 - By Haseeb Ashraf

On 17 September 2019 Immigration Minister Iain Lees-Galloway announced a shake-up to the temporary work visa policy which would be gradually implemented until 2021.

Mr Lees-Galloway initially proposed a set of reforms to the immigration policy and sought Cabinet’s approvals and public submissions between December 2018 and March 2019. These proposals were to be discussed with Cabinet by June 2019. This consultative process included inputs from industry associations, economic development agencies, local government, iwi, trade unions, education providers and other relevant stakeholders.

These changes will impact 26,000 businesses across New Zealand which employ migrant workers and the processes that they need to undergo to recruit them. Currently, there are more than 54,000 workers on temporary work visas.

A young woman working in a kitchen

These changes implement terms of the coalition agreement between the Labour Party and New Zealand First which committed to “ensure work visas issued reflect genuine skill shortages… [and] take serious action on migrant exploitation.”

A briefing paper by the minister commenting on the state of affairs in the temporary work visa space last year noted that “piecemeal improvements are not sufficient and we need to reshape the entire model to achieve a system that both puts New Zealanders first and supports businesses with genuine shortages.”

In November 2018 we saw a change to employer assisted work visas and a tightening of post study work rights which indicated a change from employee to a more employer focused system.

With the changes announced in September 2019, Immigration New Zealand is wanting to, firstly, make our work visa system more employer focused to counter migrant exploitation and introduce more checks, balances and obligations on employers hiring migrant workers to ensure that they are complying with minimum employment standards and following good employment practice.

Secondly, there is a push for employers to employ more New Zealand workers in some industries and incentivise them to recruit more New Zealanders by improving pay and employment conditions. This is in line with a recent report of the Productivity Commission which identifies a need for improvement in pay and work conditions as well as investment in capital and technology in many sectors.

In a consultation discussion paper from MBIE, the following issues and concerns were raised:

  • An unresponsive labour market which does not respond to skill and regional labour shortages. This affects the ability to affect labour market change.
  • The growth in migration of lower skilled migrants who are displacing New Zealanders in sectors which usually hire many welfare beneficiaries, with there being too few incentives for employers and industry to employ New Zealanders.
  • Issues of compliance with too few checks and balances on employers hiring migrant workers and that employers with poor track records are able to access migrant labour.
  • The various visa options provide for complexity which also results in difficulty for employers and applicants to follow the system and results in operational inefficiency as well as delays.

In responding to the above concerns, Mr Lees-Galloway has, within his announcement, referred to the introduction of one employer assisted work visa to replace the six current categories and for this visa to be processed through a new gateway framework, which includes:

  • The employer gate which assesses whether the employers are accredited to employ migrant workers.
  • The job gate in which a labour market assessment is conducted to make sure that no New Zealanders are available to meet the employer’s needs.
  • The migrant gate which vets the applicant’s health and character as well as their capability.

Changes to be gradually implemented

The main changes which are to be gradually implemented until 2021 include:

  • A new temporary work visa to replace the existing six with an employer-led approach as opposed to existing employee/applicant-led process.
  • Remuneration will be used to assess the skill level of occupations rather than the Australian and New Zealand Standard Classification of Occupations (ANZSCO).
  • Employer Accreditation (separate from current accreditation in place) to become mandatory for all employers wishing to employ migrant workers by 2021.
  • Changes to the Talent (Accredited Employer) Work Visa including a change to the remuneration rate from $55,000 to $79,560 as well as limiting the period of accreditation to 24 months.
  • A general strengthening of the labour market test for low-skilled occupations. There will be a focus on filling labour shortages in rural and regional areas which will entail three-year work visas being issued in low-skilled occupations within these areas where there is a genuine labour shortage.
  • The negotiation of sector agreements between Immigration New Zealand and industries which heavily rely on migrant labour to ensure that the pay and work conditions are attractive to New Zealanders and address workforce needs more effectively.
  • Reinstating the ability of low-skilled workers to support their partners and children as dependents on visitor or student visas. If partners are wanting to work, they must apply for a work visa on their own right.
  • Better alignment of Government institutions, MSD, Immigration NZ and the education sector – to ensure that skills and labour shortages are filled by New Zealanders and that the employment needs of employers, young people and other job seekers are met.

Throughout the consultative process reference was made the need for the labour market to be more responsive to sectoral and regional needs. For example, as in Scotland, where Regional Skills Assessments (RSAs) and Skills Investment Plans (SIPs) are both jointly used as tools to assess skill shortages in key sectors as well as various geographical areas of Scotland and data on which to base future investment in skills.

New version of ANZSCO released

ANZSCO is a system which classifies occupations based on skill level, the qualifications, licensing, registration and/or work experience that individuals require to be suitably qualified for a list of classified occupations. Each occupation has a code as well as a description of the tasks in which the individual working in that job should be engaging in.

It is used by practitioners and by Immigration NZ to assess the currency and tenure of the work visa to be issued to applicants.

The minister, in a recent briefing paper, noted anomalies in some ANZSCO classifications for some occupations, and the consequences of this on the immigration system is seen as a major challenge to the “fairness and coherence of our system.”

Currently, an example of contention is how managerial roles within the retail sector and in particular the food and hospitality industry are being relegated to supervisory level roles and being assessed as low-skilled as opposed to mid-skill level managerial positions.

Individuals employed in an occupation with a mid-skilled (level 1-3) classification are eligible for a three-year work visa option. Further they can support their partner and children as dependents and are not subject to an offshore stand down period. These jobs are being reclassified as low-skilled occupations (level 4-5) meaning that they are now only eligible for one-year work visas, are subject to a stand down period in that they must leave New Zealand for a period of 12 months after three consecutive visas and are unable to support their partners as dependents unless they had done this prior to August 2017.

On 29 October 2019, Immigration NZ circulated an amendment circular which noted that 44 occupations within appendix 7 which are otherwise classified as Level 4-5 (low-skilled) would be treated as an exception in Essential Skills Work Visa and Skilled Migrant Category instructions on the basis that applicants are paid at the New Zealand median income. On this basis, the occupation will be upgraded to as if it is skill level 1-3. This is applicable from 29 October 2019.

Immigration will continue to use ANZSCO (v1.2) up until mid-2020 after which v1.3 will be used for the Skilled Migrant Category only and the classification will be entirely scrapped for temporary work visas.

This decision is in line with Immigration NZ’s approach to fill sectors of the economy which are experiencing acute labour shortages such as residential and aged care.

For individuals holding a work visa the skill level of their job remains the same and the changes are not to be considered as retrospective.

This has opened the pathway to residency for many individuals previously assessed in lower skilled occupations who would not otherwise have been able to apply for residence. This directly affects essential skills work visa applicants as well as residence applicants in the Skilled Migrant Category who are now able to claim skilled work experience as well as an offer of skilled employment. Individuals on an essential skills work visa who fall under these occupations, will be able to support their partner and dependent children and will not have to leave New Zealand for the stand down period after three years.

Where to from here – implications for practice

Immigration law practitioners including the author, attended an ADLS Incorporated dinner with the Minister of Immigration on 8 June 2019 at the Northern Club in Auckland. Mr Lees-Galloway explained the approach that the Government was taking on employer assisted visa changes announced in November last year as well as the most recent and stated that they were looking for a more pragmatic immigration system which reacts to the needs of our economy and more specifically the labour market.

This article does not conclusively cover how the above policy changes in the temporary work visa space will be implemented but rather provides an indication of how policy is going to be shaped within the next three years. Further clarifications are required to understand the specifics of how proposed policy changes will be implemented. This is a consultative and gradual process which we expect to come to fruition by the end of 2021.

Overall, what we can see is that immigration policy is alive and kicking and that it is yet to be seen how the above changes are implemented, especially the process of accreditation which all employers will have to undergo by 2021 and how the remuneration-based skill level assessment will play out for temporary work visas.


Haseeb Ashraf haseeb@legalassociates.co.nz is a specialist immigration lawyer practising at Auckland based law firm Legal Associates.

Last updated on the 29th November 2019