In the 2nd part of his Immigration series, Harris Gu, Solicitor at Queen City Law discusses Accredited Employer Work Visa. Follow the series here.
What is an Accredited Employer Work Visa (“AEWV”)?
An AEWV is an employer-specific work visa that allows its holders to undertake full-time employment in New Zealand (“NZ”) with an accredited employer for up to 3 years.
What are the criteria to be able to apply for an AEWV?
To be able to apply for an AEWV, the NZ employer must have satisfied the following:
Step 1 – Become an accredited employer
Step 2 – Pass the job check for the role the work visa applicant has been offered the job
What it means for the employer?
Both steps must be completed by way of application to Immigration New Zealand (“INZ”), via a so-called ‘Enhanced’ online system – Advanced Digital Employer-led Processing and Targeting (“ADEPT”). [1]
In addition, both applications must be at the expense of the employer and the employer cannot pass on any costs associated with these applications to the visa applicant. [2]
Further, the employer must pay at least the median wage (currently NZD 27.76 per hour, and NZD 29.66 from February 2023) [3] unless exempt by Sector Agreements (discussed below).
It is worth noting that the median wage is not necessarily an accurate reflection of the market wage, and the minimum wage is, in fact, the market rate for many entry-level positions. [4]
So roughly speaking, before a work visa can be applied, the employer would have already paid including, but not necessarily limited to:
- INZ application fees of NZD 1,700
- Job advertising costs
- Recruitment agency fees
- Legal fees
Having already paid these fees, it is still uncertain whether the work visa can be approved. And once the work visa has been approved, the employer would need to pay the migrant worker at least the median wage.
Under the old applicant-led work visa Immigration Instructions, the employer was not required to pay the following which would make up the majority of costs:
- INZ application fees
- Legal fees
- Median wage – the legal test is whether the wage is within the market rate for a particular role
Take note that INZ fee was NZD 495, it is now NZD 1,700 (paid by the employer) + 750 (visa application fee, can be paid by visa applicant), and the difference between the median and minimum wage per annum is roughly NZD 13,000. The cost of hiring a migrant worker has increased by tens of thousands of dollars.
But why?
Why AEWV?
One of the reasons that NZ Government decided to roll out the AEWV policy in June 2022 is that the Government believed it would reduce risks ‘around business models and practices that might enable migrant exploitation’. [5]
The Government also wanted to incentivise employers ‘to employ more New Zealanders to respond to skill and labour shortages over time’. [6]However, this report published on 31 March 2022 already highlighted the problem caused by the shortage of critical staff, and this news article dated 03 November 2022 confirms that the labour shortage problem is ongoing. It is clear that the labour shortages cannot be filled by New Zealanders but migrant workers.
So just to quickly summarise, in the backdrop of the Global Economic Recession and the ongoing issue of labour shortage, the Government’s solution is making it more difficult for employers to hire migrant workers, by:
- Drastically increasing costs of hiring; and
- Making it more complicated and time-consuming to obtain a work visa
It is really difficult to make sense of this policy. Why would the Government add fuel to the flames that are already burning the employers who had been struggling due to labour shortages prior to the introduction of the AEWV policy?
Sector Agreements
To make the matter even worse, from 31 October 2022, two-year sector agreements are in place for:
- The care workforce
- Construction and infrastructure
- Meat processing
- Seafood
- Seasonal snow and adventure tourism
This means specific roles for these sectors are allowed limited exceptions to the aforesaid median wage requirements. Under the agreements, for example, entry-level positions such as construction labourers are only required to be paid at NZD 25 per hour.
Compared to the current median wage, employers can save up to roughly NZD 6,000 p.a.
Issue with Sector Agreements
Prior to the sector agreements coming into force, employers would have already hired workers for the same roles covered by these agreements at median wage. So despite this policy change, employers are still bound to pay them at the median wage. This would cause disputes at workplace.
In addition, employers will need to apply for another job check at the cost of NZD 610, due to the previously job check application was approved on the basis of paying the median wage, to be able to support a work visa application on the basis of a role that pays at NZD 25 per hour.
Case study – Employment exploitation
Counsel has observed that gruntled employers are already considering laying off workers paid at the median wage unless they agree to the wage reduction in line with the Sector Agreements.
Counsel finds these employers are usually well aware of their obligations under the employment law, but are still willing to take the risk. The rationale for their proposed action can be summarised as follows:
- That only a small portion of migrant workers would complain against their employers
- That it is more economically viable
- That replacement is easily found
It is unfortunate that these employers hold such a brazen attitude, but at the same time, they have been struggling in their businesses so understandably would endeavour to minimise the costs where possible.
Undoubtedly, if not for the current AEWV policy, such exploitation would not have occurred. Counsel is therefore compelled to write that the policy is a breeding ground for employment exploitation.
Conclusion
The AEWV policy is clearly not well planned out. It was well-intended but poorly executed, and could have well contributed to the rise of the cost of living, and a breeding ground for employment exploitation.
The Government is disconnected from reality and has its head stuck in the sand for a long time.
The policy is clearly not serving its intended purpose. Counsel recommends removing the median wage requirements and reducing application fees to tackle employment exploitation.
Prior to joining Queen City Law, Harris used to work for a former Minister of Immigration as a licensed immigration adviser for 7 years. Harris has extensive experience in dealing with all types of visa applications, as well as appeals to the Immigration & Protection Tribunal (IPT), Section 61 requests, Ministerial special directions & Ombudsman complaints. Harris obtained his LLB and BCom degrees from the University of Auckland and was admitted to the High Court of New Zealand in October 2021. Harris is pleased to have joined Queen City Law’s large award winning Immigration Law team. Harris speaks fluent Mandarin. Harris currently serving on the Auckland District Law Society (“ADLS”) Immigration & Refugee Law Committee. https://adls.org.nz/Chapter?Action=Members&Chapter_id=12. Connect with Harris via LinkedIn
[1] Para 6 – 9 of this Cabinet paper.
[2] Immigration Instruction WA2.10(l).
[3] INZ announcement dated 10 October 2022
[4] Trademe salary guide
[5] WA1.1(c).
[6] WA1.1(a).
