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A Guide For Employers: The Accredited Employer Work Visa Compulsory Employer Accreditation Explained

by | Apr 7, 2022 | Articles, Employers, News, News & Articles

Estimated Reading Time: 9 mins

Background

From 4 July 2022, employers who have gained Employer Accreditation and completed the relevant Job Check(s) will be able to start supporting migrant workers on Accredited Employer Work Visas. This includes new migrant workers (including ones from offshore) and existing migrant worker visa renewals.

Employers will soon lead the Accredited Employer Work Visa process. This means that employers will need to gain Employer Accreditation and complete the relevant Job Check(s) before they can support migrant workers on Accredited Employer Work Visas.

On 7 April 2022, Immigration New Zealand released the Employer Accreditation policy. This article will focus on the key considerations and components relating to the Employer Accreditation policy update.

Briefly, the Accredited Employer Work Visa 3-step process is as follows (in order of application):

    • Step 1 – Employer Accreditation: This is where Immigration New Zealand will check for employer regulatory compliance, confirm sound financial position, and confirm that the employer will carry out migrant worker settlement support activities. This step opens on 23 May 2022, with an estimated 10 working day processing timeframe for Standard Accreditation and High-Volume Accreditation.
    • Step 2 – Job Check: This is the new Labour Market Test (advertising test) where Immigration New Zealand will check to see if the role(s) is/are genuine and where employers will need to prove to Immigration New Zealand that there are no New Zealand Citizens or Resident Visa holders to carry out or be easily trained to carry out the role(s). Job Check Labour Market Test evidence is not required for roles paid twice the median wage ($55.52 per hour) or for roles on the Green List . This step opens on 20 June 2022, with an estimated 10 working day processing timeframe.
    • Step 3 – Accredited Employer Work Visa Application (Migrant Worker Check): This is where Immigration New Zealand checks the migrant worker to confirm that they are of good health, good character, and if they are suitably qualified through qualifications and/or relevant experience. This step opens on 4 July 2022, with an estimated 20 working day processing timeframe.

The Essential Skills Work Visa category will close on 3 July 2022. Applications under the Essential Skills Work Visa category must be submitted before this date.

Immigration New Zealand’s application fees are as follows:

Step Fee Amount
Employer Accreditation (Paid By Employer)

    • Standard: $740
    • High-Volume: $1,220
    • Upgrade (Standard To High Volume): $480
    • Employers Placing Migrant Workers With Controlling Third Parties (‘Triangular Employment Arrangements’): $3,870
    • Franchisees: $1,980
Job Check (Paid By Employer)
    • $610
Migrant Check (Paid By Migrant)
    • $540 (Plus $55 Levy)

Employer Accreditation Types

There will be 2 accreditation levels:

    • Standard Accreditation: For employers who intend to support between 1 and 5 migrant workers (job quota) on the new Accredited Employer Work Visa at any one time. Where the employer holds Standard Employer Accreditation, the Job Check will only be approved if the approval will not result in the employer having more than 5 jobs associated to them.
    • High-Volume Accreditation: For employers who intend to support 6 or more migrant workers on the new Accredited Employer Work Visa at any one time.

For Standard Accreditation and High-Volume Accreditation (excluding franchisees and employers using ‘triangular employment arrangements’), the initial Employer Accreditation duration will be for 12 months. Subsequent Employer Accreditation approvals will be for a duration of 24 months.

It is important to note that migrant workers on other visa types (such as those on Working Holiday Work Visas or Partnership Work Visas) do not count toward the total number of Accredited Employer Work Visa employees. However, Immigration New Zealand has indicated that this may change in 2023.

There are additional requirements for franchisees and employers using ‘triangular employment arrangements’. The franchisee definition and requirements are comparatively less onerous when compared to employers using ‘triangular employment arrangements’. The definition of ‘triangular employment arrangements’ is relatively robust, therefore some less obvious employers may fall within this definition. The non-exhaustive list that Immigration New Zealand has provided includes:

    • Labour hire employers;
    • Other employment agencies who send employees on work assignments to a controlling third party;
    • Employers who send employees on secondments to a controlling third party; and
    • Parent, group, holding, or umbrella companies who place their employees with a controlling third party, such as a subsidiary company that is a separate legal entity.

Employers with plans to expand and/or to use ‘triangular employment arrangements’ should seek advice before applying for their Employer Accreditation.

Trust-Based Model

Immigration New Zealand has confirmed that the Employer Accreditation application form will be relatively straightforward. Employers will need to make legally binding declarations and follow through with what has been declared. This includes carrying out the required compliance activities. If not, employers could be penalised. This means that good record keeping will be vital as the onus is on the employer to satisfy Immigration New Zealand with evidence of their compliance. If employers are not careful, they could face issues with their subsequent Employer Accreditation application 12 months later.

When assessing a subsequent Employer Accreditation application, Immigration New Zealand will check whether the employer has complied with their declarations. If the employer has not complied with the relevant requirements, Immigration New Zealand will then assess whether the issue has been rectified and examine the steps the employer has taken to mitigate the non-compliance from happening again.

Immigration New Zealand will be able to carry out compliance verification activities, this can include site visits (if permission has been given) and documentation requests. Immigration New Zealand will be able to suspend an Employer’s Accreditation for up to 3 months at a time or until there is an investigation outcome, whichever is occurs first. Non-compliance can also lead to Employer Accreditation being revoked. Serious breaches can lead to convictions with heavy fines and stand-down periods. It is therefore vital for employers to stay informed and keep on top of Immigration New Zealand’s updates.

There is no statutory right of appeal against the decision to decline an Employer Accreditation, however, it is possible to request a reconsideration by another Immigration Officer within 14 calendar days of the date of the decision.

5 Key Employer Accreditation Considerations & Components

    1. New Zealand Business Number (NZBN) & Inland Revenue Department (IRD) Numbers Are Required
      A New Zealand Business Number is required. Employers who are operating as a sole trader, a trust, or a partnership should apply for a New Zealand Business Number in a timely manner if they do not have one. Employers can apply for a New Zealand Business Number here.

      Similarly, employers must also be registered with the Inland Revenue Department.

      It should also be noted that where the employer is a sole trader, trustees in a trust, or partners in a partnership, the sole trader or at least one of the trustees or partners must have New Zealand as their primary place of established residence.

    2. Sound Financial Position
      Employers will need to prove that they are a viable and genuinely operating business. They will need to prove that they are able to meet financial obligations such as paying wages and/or salaries, paying for all other operating costs, and purchasing inventory (if relevant). Employers must prove 1 of the following:

        • Have not made a loss (before depreciation and tax) over the last 24 months; or
        • Have a positive cash flow for each of the last 6 months; or
        • Have sufficient capital and/or external investment (for example funding from a founder, parent company, or trust) to ensure the employer’s business remains viable and ongoing; or
        • Have a credible, minimum 2-year plan (for example by having contracts for work) to ensure the employer’s business remains viable and ongoing.

      If an employer is a general partnership or a sole trader, they must not be bankrupt or be subject to a No Asset Procedure. Similarly, if the employer is a limited partnership, the general partner must not be bankrupt or be subject to a No Asset Procedure.

      Employers who have been in business for less than 12 months will likely need to provide financial evidence upfront at the time of application and make their case. Most businesses will not need to submit evidence upfront at the time of application (franchisees and employers using ‘triangular employment arrangements’ will need to provide some evidence upfront). However, Immigration New Zealand may still request for evidence after the Employer Accreditation application has been submitted or during the duration of the Employer Accreditation.

      If an employer has commercially sensitive or confidential information provided in confidence to Immigration New Zealand, it must be signalled to Immigration New Zealand so that this information is not shared with other Government agencies without the Employer’s consent.

    3. Mandatory Ongoing Compulsory Settlement Support Activities
      Employers will need to provide settlement support to migrant workers within 1 month of them beginning their employment as an Accredited Employer Work Visa holder. Employers will need to also keep a record of these migrant workers confirming that they have received this information. Settlement support includes information about:

        • Accommodation options;
        • Transportation options (including driving and driver licence information, and public transportation options);
        • The cost of living;
        • How to access healthcare services;
        • Citizens Advice Bureau services;
        • Relevant community groups;
        • How to obtain an IRD number from Inland Revenue;
        • Any industry training and qualification information and options; and
        • Specific job or industry hazards.

      Some of the settlement support information listed above will only be required for Accredited Employer Work Visa holders who have been in New Zealand for less than 2 years.

      Migrant workers will need to complete online employee modules during paid work hours and within 1 month of the Accredited Employer Work Visa holder starting employment. A record of this must also be kept. This should include emails between the employer and the migrant workers.

      Similarly, anyone who makes recruitment decisions within the employer’s organisation (for example hiring managers, human resource managers, sole traders, and partners), will also need to complete online employer modules. This will need to be done once within each accreditation period. A record must also be kept of this.

    4. Robust Regulatory Compliance Checks
      Employers will need to comply with employment law, immigration law, and other business standards. Immigration New Zealand will not only look at the employer directly, they will also look at the ‘key persons’ related to the employer and their compliance history. The definition of ‘key persons’ is quite wide:

        • In a company, any person occupying the position of a director of the company regardless of whether they hold the title Director; or
        • In a partnership, any partner; or
        • In a sole trader, the sole trader; or
        • In a trust, any trustee; or
        • In a crown entity (including schools), a chief executive officer or school principal; or
        • In a tertiary education facility, a vice-chancellor or chief executive; or
        • In a body corporate or an unincorporated body, other than a company, partnership, or limited partnership, any person occupying a position in the body that is comparable with that of a director of a company; or
        • Any other person that occupies a position (including an unofficial, undocumented or undeclared position) in relation to the organisation that allows the person to exercise influence over the organisation or undertaking (for example a chief executive officer or other head person of the organisation, or a ‘shadow director’ who acts as a director or gives instructions to the appointed director(s) on how they should act), where such influence could result in non-compliance with employment or immigration regulatory standards.

      The last part of the definition listed above is very broad and can capture some managers if they have high levels of control in areas which relate to meeting employment and/or immigration regulatory standards (such as Human Resource Managers and Finance Managers).

      Employers and ‘key persons’ related to the employer must not be subject to a stand-down period or permanent ban from hiring migrant workers. They also must not have provided false or misleading information to Immigration New Zealand and/or employed a migrant worker when the migrant worker did not have the correct visa or visa conditions to allow for them to work.

      This means that Immigration Officers may decline an application if they believe that the employer is substantially the same as another organisation that does not meet the requirements for Employer Accreditation (for example, the same employer re-establishing themselves as a new legal entity).

    5. Employer Costs Must Remain With The Employer
      Employer costs (for example: advertising costs, recruitment costs, Employer Accreditation application fees, Job Check application fees, health and safety equipment required for job safety, branded uniforms, compulsory training/induction, trade testing, or equipment costs where the employer retains ownership of the equipment) must remain with the employer. This means that these costs must not be passed on. Employers should review existing employment agreements to check for compliance.

Median Wage Will Increase To $27.76 Per Hour

Although this relates to the Job Check, employers should be aware that Immigration New Zealand has announced that the median wage will increase from $27.00 per hour to $27.76 per hour on 4 July 2022. This means that advertisements for Job Checks will need to state at least $27.76 per hour, unless a sector agreement/median wage exemption applies. There are some roles that will be exempt from the median wage and qualify for Accredited Employer Work Visas at a lower pay rate. Specific jobs in construction and infrastructure, and tourism and hospitality must pay at least $25.00 an hour. Specific jobs in the care workforce sector must be paid at least $25.39 an hour.

These ‘below the median wage’ migrant workers will only be eligible for Accredited Employer Work Visas with a duration of up to 2 years and will need to leave New Zealand for a 12-month standdown period before they can apply for a further ‘below the median wage’ Accredited Employer Work Visa. The exception to this rule is if the relevant migrant workers are paid ‘at or above the median wage’ after their 2-year ‘below the median wage’ Accredited Employer Work Visas.

Immigration New Zealand is also looking at sector agreements with the meat processing, seafood, and seasonal snow and adventure tourism sectors.

What To Do Right Now

To stay ahead, employers should:

    • Think about the type of Employer Accreditation needed.
    • Examine their ‘key persons’.
    • Register for a New Zealand Business Number (NZBN) and/or Inland Revenue Department (IRD), if required.
    • Review existing employment agreements to check for regulatory compliance.
    • List all migrant workers, get a copy of their visas, check visa expiry dates, check if they have applied for a resident visa, and review their migrant workers’ visa conditions. Please keep in mind that on 9 May 2022, Open Work Visas/extensions were granted by special direction to many work visa holders with visas expiring between 9 May 2022 and 31 December 2022 (inclusive). This is to check for visa renewals.
    • Prepare compulsory settlement support documentation for future Accredited Employer Work Visa holders and prepare the relevant record keeping documentation.
    • Start the employer modules.
    • Think about the roles they would like to employ now. Think about how many of these roles you would like to employ. Draft the job descriptions.
    • Think about what migrant workers will be paid and how this will impact other workers’ pay.

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 contents of this article, please do not hesitate to contact us. Please call us +64 7 575 2882 or email hello@staylegal.co.nz.

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