NZ Accredited Employer Work Visa – Part 2

May 13, 2022
Iain MacLeod

Two weeks ago I wrote a piece on what we know about the New Zealand Accredited Employer Work Visa scheme for employers and migrants. You can read that here. This is a follow-up to that article.

Part two and three rules and requirements of the new Work Visa scheme were announced last week and as we predicted it is largely status quo on both the labour market testing side of recruiting migrants and the actual Visa application itself.

A quick recap. Getting work visas will be a three step affair including:

  1. Employer accreditation – an opportunity for all employers to demonstrate they run viable and sustainable businesses and the key people making the decisions are of good character. An online form without any evidence will be presented but what might trigger the department asking for information is (still) not yet clear.
  2. A job check – essentially a “labour market test” along with evidence of efforts to recruit and train locally. Exemptions to that are to be made if the job comes with a salary of twice the median salary (roughly $55 per hour)
  3. The work Visa application itself.

Remember – these steps cannot be done concurrently but must be done sequentially.

Job check

What we know.

  • The position must pay a minimum of $27.76 per hour based on a full-time week of 30 hours. No work visas will be available to anyone earning any less.
  • Advertising must be done for a period of at least two weeks nationally on platforms or a media that local applicants are “likely” to read.
  • Salary range must be advertised and it must be realistic.
  • That advertising must be completed no more than 90 days before the job check is filed with the department

Work Visa application

What we know:

  • Online application form and fee will apply (I am assuming it’ll be around $700).
  • Applicants will be required to prove they are suitably qualified by training and experience to fill the role and INZ will continue primarily to rely on Australia New Zealand Standard Classification of Occupations (ANZSCO) to satisfy themselves of this criteria.
  • Work visas will be granted for up to 3 years

In terms of timelines for the three steps the government believes two weeks for employer accreditation, two weeks for the job check and two weeks for the Visa application. I’ll believe it when I see it.

Losers will be the lower paid

In what is a well signalled but seismic shift which is going to have major implications particularly for hospitality and tourism based industries is that minimum effective hourly rate. In New Zealand the minimum statutory wage is $21.20 an hour and there are many people who work in hotels, cafes, restaurants etc who would earn somewhere between the minimum wage and the new required $27.60 per hour. There would be a few waiters, dishwashers, hotel housekeepers, room cleaners etc that are simply not going to earn the sort of money required to get work visas.

Pushing up costs of doing business

I’ve just had a week in Queenstown which has traditionally been seen as the jewel in the tourism crown. It wasn’t quite a ghost town but it wasn’t overflowing either. Rooms were delayed being cleaned because there was a lack of staff. Service levels in restaurants and cafes was good but everyone I asked said they were short staffed. Some Restaurants and cafes around town had closed down because they could not find staff for kitchen or front of house roles. Local wineries cannot get staff to prune or harvest fruit. It is pretty bleak for most employers down there.

That’s just Queenstown.

The obvious solution if they want migrant labour of course is to pay the minimum $27.60 per hour. That is all well and good but it is going to make places like Queenstown even more expensive than it already is (and trust me when I say the prices of everything there suggests a belief that everyone that visits arrived on their own private jet). I genuinely believe higher wages are a good thing until it puts the employer out of business.

At that ‘lower’ end of the market then there are two forces at play that is going to make any recovery from Covid extremely difficult if not impossible for many hospitality and tourism operators — full employment in New Zealand meaning it is an employees market and with plentiful job opportunities and high cost of living, places like Queenstown won’t be in the mix for many local job seekers.

With the government now imposing a minimum hourly rate for business owners to employ temporary migrants, I suspect even more are going to be pushed to the wall.

The question is where that sweet spot lies commercially. Given there is simply not the labour available in New Zealand how many employers can withstand a 25% — 30% increase in their wage bills in order to stay in business? I can live with paying $35 for a good piece of steak with great service at a reasonable restaurant, but I really object to paying $45. And if I do it’ll be on special occasions which means I will dine out less frequently than I otherwise would have.

We already have an inflation problem and this will just add to the spiraling costs of doing business.

The clear signal to employers from this government is that they are expected to recruit locally and train up locals for the types of roles that have increasingly been filled by short-term migrant labour. All well and good but with 3% unemployment there is simply not the numbers of, in particular, young people interested in that sort of work or these sorts of careers The work is hard and the hours are unsociable.

Where are all the Working Holiday Visa holders?

The government trumpeted the reopening of Holiday Working Visa schemes to young international visitors earlier this year I have no doubt to come and fill those lower skilled roles in places like Queenstown simply because the numbers are easy to control (there are annual quotas by country). In rough numbers 700 have turned up in the county out of 20,000 visas issued. It seems to me the government naïvely believed that holiday working Visa holders would descend on New Zealand in great hordes and fill a lot of these hospitality and tourism related jobs. The numbers who have arrived suggests otherwise.

With close to 100,000 job vacancies across the country and 70% of employers saying recruiting and retain staff is the greatest challenge they face this is getting serious (but good for most higher skilled migrants of course). Now we can add ‘skills and labour crisis’ to the list of pre and post covid crises gripping the country. It is a good one to have – to a point.

Another issue facing employers is with international borders now open and the abandonment of quarantine to get back into New Zealand, a lot of young New Zealanders will now go and travel the world as we seem genetically predisposed to do. That is going to squeeze employers even further.

If I were a New Zealand employer, I would be applying for accreditation as soon as possible and would start looking offshore for talent and be prepared to pay for it. Having that option available or to employ people travelling to New Zealand to find work will I suspect be the difference between staying open or not for a lot of businesses over the next challenging 12 months or so.

Until next week

Iain MacLeod

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