Many of you may have questioned why you have not heard from us for a while. Well, we have been very busy with complex (border entry) instructions and have had to file multiple cohorts of other urgent applications based on understood policy directions, only to have Immigration New Zealand move, change or completely remove the goal posts, at the last minute.
To conclude that our immigration system is confused in 2021 is a gross understatement. Before writing this article we did consider the use of the term “U-turn” for the heading, but what we have seen here is two or three U-turns in a row, which for us (sticking with the car analogy) results in the rear wheels of a car spinning, subsequently making it go around in circles. Under New Zealand transport law this is called a “sustained loss of traction”, which means a driver is doing something that is attention-seeking but not well thought through, pointless and often, quite reckless. Seems fitting.
On the temporary visa side employed migrants and their employers in particular have had to jump through a few hoops in the last few months. The direction changes have been swift and numerous, quite often painful and (currently) everyone is confused and left with a number of questions and no answers. We also find ourselves in an environment where there is now effectively full employment in New Zealand which makes ongoing discussions around an opportunity to “reset” or “deleverage” from temporary migrant labour a bit questionable really.
On the residency side things are not much better. The Skilled Migrant Category (SMC) is still technically frozen without direction and no one knows where that is heading despite a Ministerial briefing on the potential way forward in April. On Employer Accreditation, the pathway for new Talent visas holders is just as frozen and confused (post 1 November). In combination (with family separations) a number of highly skilled migrants have departed the country (some we have brought through the closed border) and many more are in the process of leaving.
What a terrible state of affairs.
We outline below the main recent changes to be across, and with those the questions that have not been answered. Like almost everything else this year on the immigration front, we expect further decisions to be reactionary and delivered at the last possible moment.
Employer accreditation
The new Accredited Employer Work Visa (AEWV) scheme will no longer come into effect on 1 November 2021 as previously announced. Its introduction will now be delayed until mid-2022. A further update on when the new AEWV scheme will now be introduced will be made as “soon” as an exact date is confirmed.
The delay in the introduction of this new policy as planned creates uncertainty for those employers who rely on migrant workers to fill vacancies. It particularly creates an immediate issue for those employers whose accreditation was due to expire in the coming months, who had not lodged an application to renew their accreditation pre 30 June 2021 as they understood the new accreditation system was due to come into effect so it was logical to not extend their accreditation until the new policy was released. In fact, INZ was even contacting employers that did lodge a new accreditation from around May onwards to double-check they really did want to proceed, given the pending changes in November!
This creates a major issue for those employers whose accreditation is due to expire before the delayed introduction of the AEWV. Employers in this situation have no way to apply for an extension of their accreditation. The existing Talent (Accredited Employer) Instructions were amended to include a cut-off date of 30 June 2021 for employers to lodge an application to secure accreditation under the “old” (now current) regime. Since 30 June it has not been possible to lodge an application to either become an accredited employer or to renew existing employer accreditation.
The delay in the introduction of the new accreditation system with a failure to introduce a transitional policy in the interim results in the unfortunate situation where there is currently no ability for an existing accredited employer to hire any new Talent visa holder to join their business post 31 October 2021 and (to be determined) into a large portion of 2022 until introduction of the AEWV, irrespective of their income level, unless the current Instructions are extended post this date. Note however this is management advice we have received – being an intention to still close off new Talent visa applications as at 31 October despite the AEWV being pushed out; there is no official advice on this. It would be sensible to extend that 31 October deadline out until next year too to align with the new AEWV implementation date (to be announced) , but until that happens (if it does) new Talent visa applications must be filed for existing accredited employers before 31 October because after that date there is no current ability to submit new ones until the AEWV comes in “mid” next year.
On a second related point, we are also waiting to see as to whether the policy allowing existing Talent visa holders to extend their visas while their residence applications are being processed is “carved out” from the cancellation of the category that comes in on 31 October. We believe it will, however, there is currently silence on this too. In the absence of a transitional process then visa applications (including interim visas) as an exception to the Instructions would be required to try to mitigate the issue if Talent visa holders’ visas expire post 31 October and before INZ can approve their resident visa application. This would allow those employees to continue working (and to maintain their lawful status) until their residence application is decided as there is no guaranteed temporary visa process to allow that in a seamless fashion as it currently stands, or if it does this has not been effectively communicated to provide comfort to applicants and their employers in this position.
If you hold a Talent visa and you are approaching the second year work anniversary, you need to be in a position to file your residence application the day after that term is up and then proactively manage your application to secure an approval within 6 months. This will include forethought, such as making sure all documents such as difficult to obtain police certificates are pre-arranged in plenty of time. It is possible to have INZ waive certain “mandatory” lodgement documents due to the Covid-19 environment, so seek assistance if you are waiting for a couple of documents that you are advised you must have to file, because there may be a way to get the application in the queue while you wait for those documents.
Our hope is that in the short term the Talent (Accredited Employer) Instructions will be amended to allow for those employers in this situation to be able to submit applications for the renewal of their accreditation under the existing scheme for a further 12 months, and for employees who hold Talent visas and have resident visa applications pending to be able to continue to extend their Talent visas for a further 6/12 months if necessary post 31 October 2021. These small changes would be a pragmatic solution as even the grant of accreditation for a period of one year will at least provide these employers with some comfort that they can continue to support their employees, when needed, to help recruit and maintain their existing workforce in a time of chronic shortages of skilled staff.
If this is not addressed in policy then there are difficult times ahead for accredited employers and their employees in this unenviable position, through no fault of their own.
Changes to Essential Skills Work Visa policy
On the positive side the Minister announced changes to the Essential Skills Instructions which will be welcomed by employers and employees alike. A stark contrast from the predicted hard re-set of the system to deleverage off reliance on migrant labour to allow those jobs to be available to New Zealanders instead. Many operators in our sector and our employer clients have always wondered where these New Zealanders are; it looks like the government now agrees that they do not actually exist.
These changes, which came into effect from 19 July 2021 include:
- Increasing the maximum duration of Essential Skills work visa for employment paid below the median wage from 12 months to two years;
- Removing the requirement to provide a police certificate or medical certificate with an application (if one has been provided previously); and
- Removing the labour market test (LMT) requirement and not requiring an employment agreement to be provided for applicants who meet specific streamlined criteria.
The announcement by the Minister stated that the two-year Essential Skills work visas will provide certainty for at least 18,000 visa holders. The streamlined application process will benefit at least 57,000 visa holders. It will also benefit their many employers who can now have some certainty that they will be able to retain their existing migrant workforce without (in many cases) wasting time and money advertising positions where they know from experience no one suitable will apply.
The newly introduced instructions for those wishing to apply for an Essential Skills Work Visa applies to applicants holding:
- A work visa of any type; or
- A student visa with conditions allowing unlimited work rights; or
- A Critical Purpose visitor visa either granted on the basis that the holder has a critical purpose for travel to New Zealand to work as critical health workers; other critical workers with visas granted for more than six months; or people belonging to a class of workers or individuals agreed to by Cabinet or the Minister of Immigration holding visas granted for more than six months.
One thing that is immediately obvious is that if you have a migrant worker who was only granted a one-year work visa or holds one of the visa types set out above and wishes to continue working in their existing roles, there is now the ability for them to apply for a new work visa for a minimum of two years with no LMT. Note too, migrants can be employed for a small period of time on the above visas before filing the “extension” shortly after starting the role to move forward without a LMT.
No one here can ever recall seeing an Essential Skills type work visa policy with no LMT and our experience goes back to the 1990s. This “free” visa should be secured as soon as possible to bank the easy two/three year term on offer here.
Increase in remuneration levels
As we predicted the remuneration levels under both the Essential Skills and Skilled Migrant Category (SMC) have been increased to reflect New Zealand’s current median wage. The new median hourly rate is $27.00 per hour.
For those employees earning below the median wage, they will now be eligible for a two-year visa. For those earning at or above the median wage, they will be able to request a minimum three-year visa.
The announcement is however much more significant for those employees who lodged an Expression of Interest (EOI) under the SMC to allow them to apply for residence. For those earning between $25.50 (the previous median wage rate) and $27.00, who are not eligible for a pay-rise, there is a high likelihood that once EOIs are selected again they may not receive a formal invitation to apply for residence. However, for people whose hourly rate falls within this range, and who can negotiate a pay increase, they may wish to do so and then update their EOI as soon as possible. We believe the government cannot be too far away (surely) from opening a revised SMC, so updating prevents a situation where they automatically lapse applications en masse without providing an opportunity to update details. We would typically expect engagement pre lapsing, however based on what we have seen this year we would not rely on that.
Priority processing of Skilled Migrant Category and Residence from Work applications
The Instructions governing the priority of the processing of SMC and Residence from Work applications have also been amended to reflect the increase in median wage. From 19 July 2021 INZ will now prioritise those SMC and Residence from Work applications where the applicant has an hourly rate equivalent to or higher than twice the median wage – $54.00 per hour or an annual salary of $112,320 or more. For those with residence applications pending with INZ who are being paid below this amount they will unfortunately now have to wait for their residence applications to be processed in the order in which they were received by INZ.
Conclusion
The recent announcement delaying the introduction of the AEWV that was intended to avoid adding further complexity into a system that is already highly complex, has actually created a more difficult environment as no forethought has been put into introducing a transitional policy provision at the same time. Unfortunately, this is yet another example of reactionary decision making with no thought of what the impact will be or what problems will be created by making (or suspending) a policy change at the last minute.
When your decision making is reactionary and late, you end up just making further problems and adding in woeful (or non-existent) communication just creates a very stressful and unpredictable environment for employers and their employees to try and operate in. Given our economy currently has full employment and a massive shortage of talent, constantly changing the rules without providing certainty as to the ability to secure a long-term future in New Zealand may well mean that we now lose valuable skilled migrants who choose to move to other countries where their long-term pathway can be secured in alternative jurisdictions who seem to know what they are doing.
For detailed advice on how the announcements may impact you, your business and your employees, please feel free to get in touch with our team of immigration lawyers.
