Transformation Of The Employer Assisted Work Visa System ...4e3qn626agz21q7e122b6h2c-wpengine.netdna-ssl.com/...This presentation should not be relied upon as a substitute for such

Transformation Of The Employer Assisted Work Visa System And

Comparison With The Australian Regime

Accreditation is Coming

Disclaimer

This is a general, high level overview only.

Specific situations need specific advice.

This presentation should not be relied upon as a substitute for such advice.

Pitt & Moore accepts no liability for actions taken in reliance on this presentation.

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Transformation Of The Employer Assisted Work Visa System

Accreditation Is Coming

The Consultation

Cabinet Paper: Minister of Immigration to Cabinet Economic Development Committee

18 December 2018: Consultation opens: Consultation Discussion Paper “A New Approach to Employer-Assisted Work Visas and Regional Workforce Planning

18 March 2019: Consultation closed for submissions

Submissions: 641 submissions (RNZ 17 April 2019)

[Cabinet Paper and Consultation Discussion Paper available on INZ website [News Centre (News and Notifications)]

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Next Steps In Process

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June 2019 Minister of Immigration to report back to Cabinet

• Outcome of Consultation and changes to proposal

• Implementation plan and financial implications

Why? Perceived Issues With Immigration System• Displacement of New Zealanders

• Growth in employer-assisted work visas since 2011/2012

• Strong economic conditions drives reliance on migrant labour

• BUT negative impact on the hiring of New Zealanders as well

• Growth in Lower-Skilled Temporary Migrant Workers• Significant growth in employment of lower skilled temporary migrants in

sectors that traditionally employ domestic welfare beneficiaries including in areas where unemployment is above national average

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Why? Perceived Issues With Immigration System (continued)• Unresponsive Labour Market Test

• Labour Market Test can’t be made harder/easier in response to different labour market needs o regions/sectors

• Limited ability to apply as policy tool to effect labour market change

• Currently can’t be applied to make access to migrant labour harder in a region experiencing high unemployment

• Lack of Incentives• Employers with high ongoing labour shortages currently not incentivised to:

• Recruit New Zealanders

• Train New Zealanders

• Improve pay and employment conditions

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Why? Perceived Issues With Immigration System (continued)

• Invest in capital and technology

• Increase productivity

• Change business models

• Inadequate Signals• Skill shortages/labour shortages not triggering adequate integrated response

from broader domestic labour market: education/skills and welfare

• No strategic solution

• Reliance on migrant workers at expense of New Zealanders continues

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Why? Perceived Issues With Immigration System (continued)• Limited Compliance

• Limited checks and obligations on employers hiring migrants

• Employers with poor compliance history (employment / immigration) continue to be able to hire migrants

• Increased risk of migrant exploitation

• Operational Complexities• Complicated system with multiple visa options/processes

• System designed around migrants not employers

• Difficult for employers and migrants to access services – inefficient with unnecessary criteria and delays

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Intended Strategic Outcomes and Objectives

• Intended Outcomes• Employers place more New Zealanders in jobs

• Ensure Temporary Migrant Workers:• Are not exploited

• Have wages and conditions consistent with New Zealand values

• Objectives• Strengthen employer standards, improve employer incentives and compliance

• Tailor labour market tests to sectors, regions and types of skill shortgage

• Trigger integrated response (education/skills, welfare/employment and employers) to improve domestic labour supply

• Simplify immigration process

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What’s On The Way Out?

Get ready to say good-bye to 6 Employer Assisted Temporary Work Visa Categories:

• Essential Skills Work Visas

• Approval in Principle

• Talent (Accredited Employer)

• Work to Residence – Long Term Skill Shortage List Occupation

• Silver Fern (Practical Experience)

• Silver Fern (Job Search)

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What’s Staying?

• Temporary Work Visas with “open” work conditions:• Working Holiday Visas

• Partnership Based Work Visas (partners of migrant workers/students and partners of New Zealanders)

• Post-Study Work Visas

• Student Visas With Work Conditions

• Temporary Work Visas under Recognised Seasonal Employer Scheme

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Employer Assisted Temporary Work Visa Categories• Employer Assisted Temporary Visas

• Employer must establish no suitable NZ workers (NZ citizens/NZ residents) available - Labour Market Test / Essential Skills in Demand Lists

• 230,000 Temporary Work Visas issued 2017/2018

• Approx. 47,000 of those 230,000 Visas (20%) = Employer Assisted Temporary Visas

• Approx. 183,000 (80%) weren’t

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Employer Assisted Temporary Work Visa Categories (continued)• Breakdown of the 47,000 Employer Assisted Temporary Visas issued:

• Approx. 39,000 were Essential Skills Work Visas• Approx. 5,500 were Talent (Accredited Employer)

• Around 16,000 employers supported Essential Skills Work Visa Applications in 2017/2018• Approx. 15,000 of those 16,000 employers (94%) employed 5 or less migrant

workers but only approx. 23,400 (60%) of the approx. 39,000 Essential Skills Work Visas issued

• Approx. 1,000 of those 16,000 employers (6%) employed 6 or more migrant workers accounting for 15,400 (40%) of approx. 39,000 Essential Skills Work Visas issues

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Observations

• Temporary Work Visa Categories responsible for the vast majority of Temporary Work Visas granted (183,000 / 80% based on 2017/2018) are outside the scope of Government’s review

• The objectives of the review will not apply to employers and migrants in the “open” work visa space:• Employers only employing migrants with “open” work visas not be subject to

accreditation and additional compliance (Employment law / Immigration)

• Why? Because migrant workers with “open” work conditions not subject to exploitation? Because they can move to another employer?

• If that is answer why not put all migrant workers on open work visas for industry/region?

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Observations (continued)

• This review will not make available to New Zealanders the vast majority of jobs currently undertaken by migrant workers

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The Gateway Framework

• Employer Assisted Temporary Work Visa System to become employer led• 6 Employer Assisted Temporary Work Visa categories to become one new visa

category – with sub-variations

• 3 Gates with checks on employers and migrants • The Employer Check Gateway

• The Job Check Gateway

• The Migrant Check Gateway

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The Gateway Framework (continued)

Source:

MBIE Factsheet

published 18 December 2018

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Gate 1: The Employer Check

Source: MBIE Factsheet published 18 December 2018

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Gate 1: The Employer Check (continued)

• Compulsory employer accreditation for all employers wanting to employ migrant workers (other than migrants with open work visa conditions and RSE workers).

• No accreditation = no migrant worker

• Three types of accreditation:• Standard (compulsory where other two aren’t)

• Labour Hire Company (compulsory for labour hire companies)

• Premium (compulsory for employers recruiting 6 or more migrant workers in a 12 month period)

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Gate 1: The Employer Check (continued)

• Purpose of accreditation is to:• Incentivise employers to train/upskill New Zealanders

• Put upward pressure on wages/conditions

• Incentivise employers to meet minimum employment/immigration regulation thereby minimising exploitation of migrant workers

• Maintain integrity of immigration system

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Accreditation - Current

• Since July 2018 accreditation through Christchurch team:

• 6 Immigration Officers

• One Technical Adviser

• One Immigration Manager

• Timelines

• INZ Accreditation Team may need to increase to 80 Immigration Officers under new framework

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Months Applications Decided

0 – 1 month 60

1 – 2 months 275

2 – 3 months 159

3 – 4 months 40

Source: Colin Paintin, Immigration Manager, 8 May 2019 Presentation To NZAMI

Gate 1: The Employer Check: Employer Type

Source:

MBIE Consultation Document published

18 December 2018

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Standard Accreditation

Labour Hire Company Accreditation

Premium Accreditation

Employer Type Available for employers recruiting five or fewer temporary migrant workers in 12

months

Compulsory for labour hire companies

• Compulsory for high volume employers (recruiting six or more migrant workers in a 12 month period)

• Voluntary for low volume employers who want to access more benefits

Gate 1: The Employer Check: StandardsStandard Accreditation

Labour Hire Company Accreditation

Premium Accreditation

Standards Base standard for low-risk employers (minimum standards)

Enhanced standards for pastoral care, active engagement in workforce programmes and endorsement by third parties

Enhanced standards for pastoral care, active engagement in workforce programmes and endorsement by third parties

Source:

MBIE Consultation Document published

18 December 2018

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Gate 1: The Employer Check: Duration

Standard Accreditation

Labour Hire Company Accreditation

Premium Accreditation

Duration Approval lasts for 12 months and requires annual renewal to maintain accreditation

Approval lasts for 12 months and requires annual renewal to maintain accreditation

Initial accreditation lasts for 12 months and requires renewal every two years for subsequent renewals

Source:

MBIE Consultation Document published

18 December 2018

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Gate 1: The Employer Check: IncentivesStandard Accreditation

Labour Hire Company Accreditation

Premium Accreditation

Incentives Access to temporary migrant workers subject to job checks being met

Access to temporary migrant workers subject to job checks being met

Additional benefits to accessing temporary migrant workers include: • Ability to offer

work-to-residence for skilled migrants

• Three-year visas for lower-skilled migrants in regions with tight labour markets

Source:

MBIE Consultation Document published

18 December 2018

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Premium Accredited Employers - Incentives

• Pathway to Residence • 150% of NZ median income (currently $50/hour) or more. Currently 150% =

$37.50/hour or $78,000 per annum for 40 hour week

• No labour market test [Note: Non-Premium employers will need to pay 200% of NZ median income to avoid labour market test (currently $50 / hour or $104,000 per annum for 40 hour week

• Will be indexed with SMC thresholds for ANZSCO 4 & 5 roles at 150% for higher skilled and updated annually to reflect wage movement.

• Appears will replicate current Accredited employer rules i.e. residence after two years.

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Premium Accredited Employers – Incentives (continued)• Pathway to Residence (continued)

• Increase in threshold to 150% of median income (currently $78,000):• Because $55,000 since 2008

• Too many lower-skilled migrants using Talent (Accredited Employer) as route to residency if cant make SMC:• Points

• English language

• 180 nurses applied Talent (Accredited Employer) visas 2017:• 50% earned between $65,000 to $75,000

• 50% below $65,000

• Would have to use SMC (in 2017/2018 750 nurses granted residence under SMC)

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Premium Accredited Employers – Incentives (continued)• Maximum visa duration extended to 3 years for lower skilled migrant

workers if:• Employed by premium employers in tight labour markets (low unemployment

and low underutilisation compared to national average)

• No significant infrastructure constraints

• No proposal to remove stand-down period after 3 years for lower skilled workers generally or of Premium Employers in particular

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Employer Prohibition - Current

• Current grounds for denying employer access to temporary migrant workers under Essential Skills:• employer on the MBIE Labour Inspectorate Stand Down List (“the Stand Down List”). If the

employer on the Stand Down List the migrant’s visa application will be declined (see for example INZ Instruction W2.10.15(c))

• Employer fails to meet relevant INZ compliance Instructions (for example W2.10.5, W2.10.6, W2.10.10, WK3.5, WK3.15, WR1.10 and WL3.11)

• Currently INZ tests employer history compliance / non-compliance (employment law/immigration law) when migrant submits work visa application

• Migrant applicant PPI’d

• MBIE suggests accreditation will give migrant greater certainty that employer will not be prohibited. But will it? Snap-shot in time.

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Compliance With Employment Law Is Hard

Some Employers Not On Stand Down List - Headlines

• “Payroll Issues Confined To MBIE and Police” [RNZ 08/03/2016]

• “Government To Spend $30m On Fixing Broken Payroll System”[RNZ 03/02/19]

• “DHBs Unsure How To Pay Possible Millions Owed To Staff”[RNZ 13/03/19]

• “9,000 Corrections Staff To Get Holiday Pay Arrears This Year”[RNZ 25/03/2019]

• “Overseas Teachers Paid Below Minimum Wage”[NZ Herald 22/04/19]

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Proposed Employer Exclusion - Standard Accreditation

• Employer is on Employer Stand Down List• 97 as at 22 May 2019

• Key people:

• Currently involved in no asset procedures

• Currently involved in bankruptcy

• On banned directors list

• Convicted of employer offence under Immigration Act or having employed unlawful immigrants

• Provided false/misleading information material to immigration decisions in previous 5 years

• Employer has not provided previous ESWV holders remuneration required by employee’s work visa conditions

• Information available online for bullets 1, 2 (i) and 2(ii) and 2(iii)

• INZ hold information in respect of bullets 2(iv), 2(v) and 3

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Key People

• Company:• Directors

• Partnership:• Partners

• Body Corporate (other than company, partnership, limited partnership):• Position comparable to Director and any other position that allows the person

holding the position to exercise significant influence over management

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Employer Assessment – Standard Accreditation - Minimise Risk of ExploitationHave an induction process in place that ensures:

• Migrants provided with information that supports them for life in New Zealand; and

• Migrants aware of rights, entitlements and access to independent advice. If renewing a visa, evidence must be supplied demonstrating that these rights and entitlements have been provided.

Employer accreditation application must contain copies of:

• information being provided to migrants and source (INZ Settlement Team will provide information packs)

• rights and entitlements information provided to migrants (at visa application (Gate 3) migrant must provide a signed copy of this letter. Online modules also available.

• If migrant applying to renew a visa (Gate 3), evidence must be supplied demonstrating that entitlements have been provided (annual leave, sick pay etc.)

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Employer Assessment – Standard Accreditation – Train/Upskill New Zealanders• Demonstrate actively training and up

skilling New Zealanders.

• Demonstrate working with new entrants to the labour market or jobseekers.

• Employer to provide information setting out approach to training and development, including budget if applicable, as well as any external and internal training

• Employer to demonstrate how contributed to employment of new entrants/jobseekers within last two years and retained them for longer than 90 days (employment records or demonstrated by participation in an external graduate/work experience/back to work programme)

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Employer Assessment – Standard Accreditation – Lifts Wages and Conditions

• On application by migrant to renew a visa, migrant’s hourly rate of pay must have increased by at least dollar value increase in median wages for same period

• Employer to have given consideration to unique health and safety needs of migrants and environment they are entering

• Employer must provide salary rate. This must match the remuneration as part of the migrant’s application.

• Employer must provide information setting out approach to health and safety, tailoring it to migrants i.e. how they address language barriers, how they ensure that the migrant is aware of health and safety practices that may differ from their country of origin?

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Employer Assessment – Standard Accreditation –Integrity of Immigration System

• No redundancies in last 12 months for occupation/s being recruited for.

• Proactive disclosure of any conflicts of interest.

• Application for accreditation will be declined where an immigration officer considers accreditation would create unacceptable risks to the integrity of New Zealand's immigration or employment laws or policies.

• Immigration officer may require more information to confirm Employer is:

• bona fide employer with a genuine job offer;

• financially sustainable enough to employ the migrant.

• First and second bullet: A statement from the employer is sufficient.

• Third bullet: A criminal history check would form part of requirement.

• Fourth bullet: At the discretion of the immigration officer.

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Proposed: Employer Exclusion – Labour Hire Companies and Premium Accreditation

• Employer is on Employer Stand Down List• Key people:

• Been involved in no asset procedures within last 4 years

• involved in bankruptcy within last 4 years

• On banned directors list• Convicted of employer offence under

Immigration Act or having employed unlawful immigrants

• Provided false/misleading information material to immigration decisions in previous 5 years

• Employer has not provided previous ESWV holders remuneration required by those employee’s work visa conditions

• Information available online for bullets 1, 2 (i) and 2(ii) and 2(iii)

• INZ hold information in respect of bullets 2(iv), 2(v) and 3

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Employer Assessment – Labour Hire/Premium Accreditation - Minimise Risk of ExploitationHave an induction process in place that ensures:

• Migrants provided with information that supports them for life in New Zealand; and

• Migrants aware of rights, entitlements [and access to independent advice]. If renewing a visa, evidence must be supplied demonstrating that these rights and entitlements have been provided.

Employer accreditation application must contain copies of:

• information being provided to migrants and source (INZ Settlement Team will provide information packs)

• rights and entitlements information provided to migrants (at visa application (Gate 3) migrant must provide a signed copy of this letter. Online modules also available.

• If migrant applying to renew a visa (Gate 3), evidence must be supplied demonstrating that entitlements have been provided (annual leave, sick pay etc.)

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Employer Assessment – Labour Hire/Premium Accreditation - Minimise Risk of Exploitation (Continued)

Additional To Standard Accreditation Requirement

• Must have a transparent pastoral care policy that includes broader support for things like finding employment for partners, accommodation, enrolling kids in school etc.

• Provide copy of pastoral care policy

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Employer Assessment – Labour Hire/Premium Accreditation – Train/Upskill New Zealanders

Not Standard plus supplement

• Must have a workforce development strategy in place, or is part of an industry association/commerce body with a workforce development strategy that they can demonstrate they are contributing to.

• Has an active graduate/apprenticeship programme or, is part of an industry body that has a graduate programme/apprenticeship scheme/work experience programme that they participate in or is in an Industry partnership with MSD or can demonstrate a history of employing jobseekers for longer than 90 days.

•

• Must provide copy of strategy, and if reapplying for accreditation, evidence of progress against goals.

• Must provide evidence of participation in programmes or employment.

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Employer Assessment – Labour Hire/Premium Accreditation – Lifts Wages and Conditions• On application by migrant to renew a

visa, migrant’s hourly rate of pay must have increased by at least dollar value increase in median wages for same period

• Employer to have given consideration to unique health and safety needs of migrants and environment they are entering

• Employer must provide salary rate. This must match the remuneration as part of the migrant’s application.

• Employer must provide information setting out approach to health and safety, tailoring it to migrants i.e. how they address language barriers, how they ensure that the migrant is aware of health and safety practices that may differ from their country of origin?

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Employer Assessment – Labour Hire/Premium Accreditation – Lifts Wages and Conditions (continued)

Additional To Standard Accreditation Requirement• Demonstrate that they are

increasing wages and conditions. • Have no objections from the

Labour Inspectorate or WorkSafe. • The relevant union is given the

opportunity to provide an objection to an employer’s accreditation, and this is taken into consideration

For bullet 1, Government suggestions include (not exclusive):

• Being a living wage employer; • If less than 20 employees,

demonstrating annual pay increases have kept pace with median wage increases;

• Endorsement/support from the relevant union (different to not receiving an objection (see bullet 3));

• ISO certification; • Have a pay equity strategy in place; • Have diversity policy in place

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Employer Assessment – Labour Hire/Premium Accreditation – Integrity of Immigration System• No redundancies in last 12 months for

occupation/s being recruited for.

• Proactive disclosure of any conflicts of interest.

• Application for accreditation will be declined where an immigration officer considers accreditation would create unacceptable risks to the integrity of New Zealand's immigration or employment laws or policies.

• Immigration officer may require more information to confirm Employer is: • bona fide employer with a genuine job

offer; • financially sustainable enough to employ

the migrant.

• First and second bullet: A statement from the employer is sufficient.

• Third bullet: A criminal history check would form part of requirement.

• Fourth bullet: At the discretion of the immigration officer.

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Employer Assessment – Labour Hire/Premium Accreditation – Integrity of Immigration System (continued)

Additional To Standard Accreditation Requirement

• Must have been operating for at least two years, or has independently verified evidence that they will have sufficient revenue and/or capital to cover costs, including the employment of any migrant for the next 18 months.

In respect of incorporated company incorporation date is available publically (companies register), otherwise independently verified information will need to be provided by the employer

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Indicative INZ Accreditation Fees For Employers• Standard: $600

• Labour Hire Company: $2,000

• Premium: $2,000

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Gate 2: The Job Check

• Source: MBIE Factsheet published 18 December 2018

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Four Job Pathway Options

• Highly-paid threshold Paying 200% of the median NZ income or 150% for premium employers (no labour market test) OR

• Regional skills shortage list Published annually at a regional level Skilled workers (ANZSCO 1-3) (no labour market test) OR

• Sector agreements Negotiated agreements (includes labour market test) Predominantly low-to-mid skill workers (ANZSCO 4-5) OR

• Regional labour market test Can be adjusted to make migration easier or harder. All remaining jobs

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Job Pathway 1: Highly-paid threshold

• Highly-paid threshold• The threshold would be reviewed annually against the national median

income

• Currently national median income = $25/hour:• 200% = $50/hour ($104,000 per annum for 40 hour week)

• 150% (Premium Employers only) = $37.50/hour ($78,000 per annum for 40 hour week)

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Job Pathway 2: Regional Skills Shortage Lists

• To be published annually at regional level

• 27 May 2019 Immediate Skills Shortage List replaced by Regional Skills Shortage List

• 6 regions under ISSL became 15 regions under RSSL

• Aiming for greater focussed flexibility

• Aiming for greater involvement education/training sector; welfare and employers

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Job Pathway 3: Sector Agreements

• Industries with heavy reliance on migrant workers

• Negotiated with representative industry bodies

• Three year term then renegotiated to reflect changing conditions

• Compliance compulsory for employers recruiting migrants in that sector

• Will set out:• Occupations covered by the sector agreement• Employer accreditation standards• Application of labour market test• Requisite wages and employment conditions

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Job Pathway 3: Sector Agreements (continued)

• Will set out (continued):• Caps on total number of migrants that can be recruited

• Training commitments

• Any special conditions

• Employers will need to commit to:• Industry productivity

• Investment in training/development domestic workers

• Better conditions domestic/migrant workers

• Aim to reduce industry demand on migrant labour

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Job Pathway 3: Sector Agreements (continued)

• First sectors out of the blocks:• Aged Care

• Dairy Farming

• Tourism

• Hospitality

• Road Freight and Transport

• Later: • Forestry, Fishing, Meat Sectors

• RSE policy to be reviewed. Possible sector agreement

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Job Pathway 4: Regional Labour Market Tests

• Labour market tests will be regionally bespoke

• Made harder or easier on a regional basis depending on how well domestic labour market performing and reliance on temporary migrant workers

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Impact of Regional Dynamics on Application of Labour Market Test

Based on diagram from MBIE Consultation document published 18 December 2018

Labour Demand Labour Demand

Domestic Labour Supply

High Low

High• Harder labour market test to

access migrant labour • High investment in domestic

response (education/welfare)

• More obligations on employers i.e. recruiting and training New Zealanders

• Harder labour market test to access migrant labour

• Moderate investment in domestic response (education/welfare)

• Some obligations on employers i.e. training and wages

Low • Relaxed access to migrant labour, subject to infrastructural constraints

• Moderate investment in domestic response (education/welfare)

• Some obligations on employers i.e. training and wages

• Moderate access to migrant labour

• Low investment in domestic response (education/welfare)

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Gate 3: Migrant Checks

Source: MBIE Factsheet published 18 December 2018

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Specific Checks

• Status quo: Identity, health, character, capability

• Migrants can only apply for visa if:• Employer accredited (Gate 1)

• Job cleared (Gate 2)

• Arguably provides migrant with greater certainty

• Shifts some cost from migrant to employer

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Other Proposals

• Mid-skilled remuneration threshold (ANZSCO 1 – 3) to increase• currently paid between 85% - 100% of national median wage (currently

$21.25 - $25.00/hour) to have remuneration threshold increased to 100% (currently $25) in line with SMC

• Stop continuous rolling over of temporary work visas where no pathway to residence (SMC)

• Reinstate Family Entitlement for Lower Skilled Migrant Workers• Reinstate sponsorship of partner / children

• Partners: visitor visa unless obtained employer assisted work visa in own right

• Children: domestic student

• Visas for same period as principal applicant

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Other Proposals (continued)

• Stand down period for lower skilled migrants• Cabinet Paper acknowledged employers opposed to stand down period as

creates disruption and uncertainty

• Cabinet Paper said Consultation would test if policy objectives for stand down (prevention of lower skilled migrant workers becoming settled) could be met in other ways

• Consultation document said: “No proposal is being made. However, your views on this matter are being sought.”

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Timetable27 May 2019: RSSL replaced ISSL

Mid 2019 Government announces decisionson final proposals

August 2019 Talent (Accredited Employer) thresholdto 150% national median wage

Mid-skilled ANZSCO 1-3 threshold to 100%

Second half 2019

Aged Care and Tourism/HospitalitySector Agreements Negotiated

Early 2020 Aged Care and Tourism/Hospitality Sector AgreementsOperational

January 2020 Integrated programme between education/skills, welfare employment and immigration

April/June2020

Gateway Framework fully implemented

First half 2020 Dairy Farming and Road Freight/TransportSector Agreements Negotiated

Second half 2020

Dairy Farming and Road Freight/TransportOperational 65