Next Monday – Remuneration thresholds for work and residence visas will change.

Immigration New Zealand has updated the remuneration or pay rate thresholds. The changes will take effect on the 24th of February 2020.

The reason behind these changes is because the NZ median wage rate has increased to NZD $25.50 per hour (up 2% from last year) and median salaries are now at NZD $53,040 per year for a 40-hour per week job.

We’ve detailed the changes here but please do get in touch to discuss your personal or workplace situation and we can talk one on one.

The following wage or salary threshold requirements will apply to people applying for work visas under the Essential Skills Category as well as those applying for Residence under the Skilled Migrant Category.

Essential Skills Work Visas

The remuneration thresholds for people applying for an Essential Skills Work Visa will change as follows:

Remuneration ANZSCO 1-3 ANZSCO 4-5
$38.25 per hour or more Higher Skilled Higher Skilled
$21.68 – $38.24 per hour Mid Skilled Lower Skilled
Less than $21.68 per hour Lower Skilled Lower Skilled

 

Who does this affect?

The good news is that if you or your employees hold an Essential Skills work visa right now, you will not be effected.

However, when you or your team member need to apply for or renew a work visa on or after the 24th of February 2020 you/they may face changes. Here’s an example.

If a carpenter who currently falls within the mid-skilled band earning $21.50 per hour, (ANZSCO 1-3) renews their visa after the 24th of February, they will now fall into the lower-skilled remuneration threshold.

This means they will incur the following restrictions:

  • – 12 month visa eligibility (maximum 3 year Low Skilled visas before a 12 month stand down period applies).
  • – Their family members on dependent visas will no longer be eligible to obtain dependent visas and will need to be eligible for and obtain visas in their own right.

 

An option for an employer here could be to increase their hourly rate to at least $21.68 per hour. This would allow the carpenter to continue to fall within the mid skilled stream and have the benefits associated with that. This would include having their partner join them as a dependant and have a possible pathway to residence.

Not sure of where your employees salary lies on the new table? Just ask us – happy to have a quick chat to let you know.

Residence – Skilled Migrant Category

When it gets to applying for Residence under the Skilled Migrant Category, people will see slightly different remuneration thresholds. These are detailed below.

Remuneration       Occupation
$25.50 per hour or more ANZSCO 1-3 ( for example doctors, nurses, engineers, skilled trades like carpenters and electricians)
$38.25 per hour or more ANZSCO 4-5 (for example lower skilled trades like concrete workers and scaffolders)
$25.50 per hour or more Exempt Occupations ANZSCO 4-5

 

Why the higher pay rate for the lower skilled roles?

Yes you are right. It does look odd. Under the new pay scale, doctors only have to earn more than NZ$25.50 per hour to be able to apply for residency, whereas a scaffolder, for instance on ANZSCO 4-5  has to earn at least NZ$38.25.

This is because the Government wants to encourage highly skilled people to stay in New Zealand and wants to make it easier for them. Meeting these thresholds for these occupations is usually not an issue. It takes a long time for New Zealand to grow and train their own people in similar roles and therefore these skilled people are in high demand.

On the other hand, a lower skilled role, like a scaffolder, is deemed to be easily trainable and should be taken up by a New Zealander. Traditionally these roles were not eligible for residence – regardless of the level of pay. The government has identified however that those who earn high wages in these occupations are highly skilled and should be treated as such. Giving them a pathway to residence when they are high earners.

What are exempt occupations?

These are occupations in New Zealand that are listed as lower skilled when referring to ANZSCO but are in reality skilled roles are in high demand – there are a lot of vacancies – now and for the foreseeable future.

Examples are Child Care Workers and Personal Care Assistants or “Carers” working in Aged Care facilities. People who have theses occupations will be able to apply for residency with a hourly rate of NZ$25.50 or more.

How might these changes affect employers?

Changes to the remuneration thresholds may have following implications for employers of migrant workers.

  • – Increased turnover of lower skilled staff – because they have to leave the country, they feel less stable in New Zealand or their family can’t join them.
  • – Increase in labour market tests – required to support additional visa applications.
  • – Potential salary increase requests from employees – so they can maintain their ‘high skilled status or ‘mid skilled’ status.
  • – Increase in employee requests for confirmation of salary – to support a visa application (SMC).

 

What are the next steps?

Put this on your ‘to do’ list for this week! If you think you may be affected by this new threshold, or have staff that may be affected, it’s a good idea to act swiftly and lodge any visa applications before the 24th of February 2020.

To find out more about our visa services and talk to one of our team about your situation please contact us today.