The Update

On 15 July 2020, Immigration New Zealand released the official policy for the 27 July 2020 Essential Skills Work Visa changes. This article will explain the changes that will come into effect on 27 July 2020. The key changes are:

• Immigration New Zealand will shift away from using ANZSCO codes to a New Zealand median wage-based classification system for Essential Skills Work Visas.
• Immigration New Zealand will reinstate the ability for lower-skilled/low-paid Essential Skills Work Visa holders to support their partners and/or child(ren).

New Zealand Median Wage-Based Classification System for Essential Skills Work Visas

Currently, Essential Skills Work Visas have a skill band classification system (higher-skilled, mid-skilled, and lower-skilled). This is determined by the migrant worker’s remuneration and ANZSCO code.

From 27 July 2020, Immigration New Zealand will simplify this process by implementing a New Zealand median wage-based classification system. The current New Zealand median wage is $25.50 per hour. Migrant workers will be either classified as being paid below the New Zealand median wage (low-paid) or being paid at or above the New Zealand median wage (high-paid).

From 27 July 2020, Immigration New Zealand will simplify this process by implementing a New Zealand median wage-based classification system. The current New Zealand median wage is $25.50 per hour.

Immigration New Zealand will use the New Zealand median wage to determine the labour market test requirements, the visa duration, and the visa types that the migrant worker can support their partner and/or dependent child(ren) on. Immigration New Zealand has provided a helpful table to summarise the key changes:

• Labour Market Test
  Generally speaking, for most Essential Skills Work Visas (where the migrant worker does not meet the requirements for any skill shortage list), employers will still need to carry out a labour market test to demonstrate that they have made genuine attempts to advertise the job vacancy to recruit suitable New Zealand citizens, permanent residents, or residents.

  From 27 July 2020, an employer of a high-paid migrant worker will not need to engage with the Ministry of Social Development to request for a Skills Match Report. An employer of a low-paid migrant worker must engage with the Ministry of Social Development to request for a Skills Match Report.

  Previously, employers only needed to engage with the Ministry of Social Development to request for a Skills Match Report if their migrant worker’s job was at ANZSCO skill level 4 or 5. From 27 July 2020, an employer of a high-paid migrant worker will not need to engage with the Ministry of Social Development to request for a Skills Match Report. An employer of a low-paid migrant worker must engage with the Ministry of Social Development to request for a Skills Match Report. It is therefore vital that migrant workers’ hourly wage is calculated correctly.

• Visa Duration
  High-paid migrant workers will be issued with an Essential Skills Work Visa with a duration of up to 3 years. Lower-skilled/low-paid Essential Skills Work Visa applications that are received by Immigration New Zealand on or after 10 July 2020 until 10 January 2022 inclusive, will be issued with an Essential Skills Work Visa with a duration of up to 6 months.

  High-paid migrant workers will be issued with an Essential Skills Work Visa with a duration of up to 3 years. Lower-skilled/low-paid Essential Skills Work Visa applications that are received by Immigration New Zealand on or after 10 July 2020 until 10 January 2022 inclusive, will be issued with an Essential Skills Work Visa with a duration of up to 6 months.

  From 11 January 2022, low-paid migrant workers will be issued with an Essential Skills Work Visa with a duration of up to 12 months. The low-paid visa durations are also subject to the stand-down period requirements.

Reinstate Lower-Skilled/Low-Paid Work Visa Holders’ Ability to Support Family

From 27 July 2020 Immigration New Zealand will reinstate the ability for lower-skilled/low-paid Essential Skills Work Visa holders to support their partner and dependent child(ren) to New Zealand for the duration of their work visa. The lower-skilled/low-paid work visa holder will still need to meet the minimum income threshold (currently at $43,322.76 gross per annum).

From 27 July 2020 Immigration New Zealand will reinstate the ability for lower-skilled/low-paid Essential Skills Work Visa holders to support their partner and dependent child(ren) to New Zealand for the duration of their work visa.

Low-paid Essential Skills Work Visa holders can only support their partners on visitor visas, not work visas. However, the partner of a low-paid Essential Skills Work Visa can apply for a work visa in their own right. Low-paid Essential Skills Work Visa holders can also support their dependent child(ren) for visitor visas (if they are under school age) or domestic student visas (if they are at primary or secondary school age).

Low-paid Essential Skills Work Visa holders who meet the WF3.1.1 exceptions will still be able to support their partners on work visas.

High-paid Essential Skills Work Visa holders can support their partners on work visas or visitor visas. High-paid Essential Skills Work Visa holders can also support their dependent child(ren) for visitor visas (if they are under school age) or domestic student visas (if they are at primary or secondary school age).

All offshore partners and dependent child(ren) will still be subject to the current border restrictions.

Potential Pitfalls That Migrant Workers & Employers Need to Know

• Annual Salary to Hourly Wage Calculations
  Migrant workers on salaries and their employers should be mindful when converting their annual salary to an hourly wage.

  If a migrant worker works a range of hours each week, Immigration New Zealand will divide the annual salary by the maximum number of hours worked to calculate the migrant worker’s hourly wage

  Immigration New Zealand may ask to see the actual hours worked by the migrant worker. If a migrant worker works a range of hours each week, Immigration New Zealand will divide the annual salary by the maximum number of hours worked to calculate the migrant worker’s hourly wage.

• ANZSCO Codes Still Relevant
  While the 27 July 2020 changes shift away from using ANZSCO codes for the classification of Essential Skills Work Visas, it does not fully remove the use of ANZSCO codes. Migrant workers will still need to match their job to a relevant ANZSCO code so that Immigration New Zealand can determine whether the migrant worker is suitably qualified (through their qualifications and/or relevant experience) Therefore, Immigration New Zealand will still need to determine if the ANZSCO code selected is a substantial match.

  Migrant workers still need to match their job to a relevant ANZSCO code so that Immigration New Zealand can determine whether the migrant worker is suitably qualified (through their qualifications and/or relevant experience).

  Migrant workers should still select their ANZSCO codes carefully at the Essential Skills Work visa stage because the Skill Migrant Category Residence Visa policy remains ANZSCO code-centric. Poor Essential Skills Work Visa ANZSCO code selection could affect migrant workers’ ability to claim points under the Skilled Migrant Category later.

• Lower-Skilled/Low-Paid Stand-Down Period
  The lower-skilled work visa stand-down period will still apply to low-paid Essential Skills Work Visa holders. This means that low-paid migrant workers who have worked in New Zealand for 3 years on lower-skilled/low-paid Essential Skills Work Visas will still need to leave New Zealand for 12 months to qualify for a further low-paid Essential Skills Work Visa. The migrant worker may remain in New Zealand if they are approved for a high-paid work visa after holding lower-skilled/low-paid work visas for 3 years.

  The lower-skilled work visa stand-down period will still apply to low-paid Essential Skills Work Visa holders.

  It is important to note that, Immigration New Zealand will delay the introduction of the 12 month stand-down period for lower-skilled/low-paid migrant workers who have had their Essential Skills Work Visas extended by the 7 July 2020 work visa extension announcement.

• Variation of Conditions
  A migrant worker who holds an Essential Skills Work Visa can apply for a Variation of Conditions if they are wanting to change their employer (not their job title and/or job location, unless the job is on a skill shortage list and the migrant worker meets the skill shortage list requirements).

  From 27 July 2020, a migrant worker who is on a mid-skilled or a higher-skilled Essential Skills Work Visa and is looking to change their employer will not be granted a Variation of Conditions if the new job offer is low-paid (paid under $25.50 per hour). The migrant worker must apply for a new work visa.

  From 27 July 2020, a migrant worker who is on a mid-skilled or a higher-skilled Essential Skills Work Visa and is looking to change their employer will not be granted a Variation of Conditions if the new job offer is low-paid (paid under $25.50 per hour). The migrant worker must apply for a new work visa.

  Similarly, a migrant worker who is on a high-paid (paid at or above $25.50 per hour) Essential Skills Work Visa and is looking to change their employer will also not be granted a Variation of Conditions if the new job offer is low-paid (paid under $25.50 per hour). The migrant worker must apply for a new work visa.

How We Can Help

This article was written to provide general guidance only. It is correct at as the date of this article and is subject to further updates. Stay Legal is always happy to provide immigration guidance and solutions. If you have any questions about the 27 July 2020 Essential Skills Work Visa changes, please do not hesitate to contact us.   Please call us +64 7 575 2882 or email hello@staylegal.co.nz.