New visa adds red tape for construction sector employees

By Nick Mason – partner, Pitt & Moore Lawyers

With unemployment at a low and a 3,000 plus worker shortfall in the construction sector, the latest changes to New Zealand’s immigration policy look set to add even more red tape to the process of bringing in workers from overseas.

The 2021 BDO Construction Sector Report found that the shortage of skilled staff, which eased in 2020, has now rebounded to a level where it is one of the greatest challenges facing the industry.

More than 60% of survey responders said their current staffing levels did not meet their needs, more than 50% were actively looking for additional onsite staff and more than 35% were looking for office-based staff. The report said that the closed border to new staff was a major factor in the current staff shortages and that half the industry participants would be massively disrupted if existing work visas were not renewed, or replacement immigrants were not permitted to enter New Zealand.

This year’s introduction of the Accredited Employer Work Visa (AEWV) – a new temporary work visa that opens to applications from July 4, 2022 – is unlikely to ease this situation.

We expect this new process to mean an increase in complexity and red tape for construction businesses looking to employ skilled migrant workers to fill those labour gaps.

Immigration New Zealand (INZ) is replacing the Essential Skills Work Visa, the Talent (Accredited Employer) Work Visa and the Long-Term Skill Shortage List Work Visa with the AEWV. INZ says the AEWV will reduce reliance on lower-paid temporary migrant workers and increase the overall skill level of migrants coming to work in New Zealand.

INZ says it will also combat migrant exploitation and misuse of the immigration system by filtering out employers who have previously breached immigration requirements or employment standards, at the accreditation stage.

However, it will also introduce more red tape for employers, who will have to deal directly with INZ and go through the accreditation process before advertising jobs. The process is more complex and bureaucratic than anything we have seen before in New Zealand, and we recommend employers be aware of the requirements and get ahead of the game.

In short, INZ is introducing a three-check process to manage applications and ensure that employers and migrants fit the new requirements. The three checks are:

1. Employer accreditation

2. Job check

3. Migrant check

Employer accreditation

The first step sees employers able to apply from May 9, 2022 to ensure they can get accreditation before migrant applications open on July 4. Employers don’t need to be accredited until they want to start employing migrants, but a delay in obtaining accreditation means a delay in an employer’s ability to support a migrant’s application.

Standard accreditation is required for up to five migrant workers on AEWV, and high-volume accreditation is for those employing six or more migrant workers on AEWV.

The requirements for standard accreditation include being IRD registered and holding a New Zealand Business Number, having no recent history of regulatory non-compliance, having appropriate employment documentation, and taking steps to minimise the risk of exploitation.

In addition, for high-volume accreditation, jobs must meet a minimum wage requirement of 10% above the minimum wage or be covered by a collective agreement.

There are further requirements for franchisees and for businesses that place AEWV holders with third parties, as it is considered that the risk of migrant exploitation is increased in such work environments.

Job check

The second check INZ will carry out is a job check or labour market test to ensure that, for any job offered through the AEWV scheme, the employer holds accreditation, the employment is acceptable, and no New Zealanders are available.

The labour market test requirements vary for jobs paying above and below the median wage and depend on whether the job is located in a city or a region. There are also specific job advertising requirements to ascertain the availability of New Zealanders to do the job.

A Labour Market Test is not required if;

• the job pays 200% of the median wage, currently, the median wage is $27 an hour

• the job is in the regions and pays at, or above, the median wage

• the job is on a skill shortage list, in a city, and pays at, or above, the median wage.

Migrant check

The final step is the migrant check, ensuring the applicant meets the visa requirements. This is done through online applications, available from July 4, 2022, and ensures that the applicant is suitably qualified and meets requirements in terms of health, character and bona fide credentials.

A migrant will not be able to submit their application unless the employer is already accredited and the job has passed the job check stage.

What is next?

INZ charges $2130 for an employer accreditation application and says it will take on average 79 days to process the application. We recommend that employers don’t leave applying to the last minute. We don’t yet know if employers will have review or appeal rights where negative decisions are made.

Initially, this system change will undoubtedly increase costs, time and red tape, and support for navigating the processes involved will be needed.

Once in the system as an accredited employer things should become more streamlined.