Calling all employers – changes are coming, are you ready?

By Elly Fleming

17 November 2023

Migrant exploitation fixes to impact all employers of migrants

Media coverage over the last year or so about migrant exploitation has the country concerned. And rightly so. How some migrant employees have been treated by scammers is nothing short of inhumane.

This bad behaviour by a few has seen regulatory consequences for all. There has been an increase in workplace investigations with joint compliance efforts by the Labour Inspectorate and Immigration New Zealand (INZ). There are also new powers for enforcement agencies to access employment documents, the establishment of a whistleblower hotline, and legislation that will impact every employer of migrant employees, even the good employers who might make a genuine minor mistake.

Coming into force on 6 January 2024 is The Worker Protection (Migrant and Other Employees) Act, which amends the employer offences and penalties in the Immigration Act 2009, the Employment Relations Act 2000 and the Companies Act 1993. 

At a high level, the Act establishes a system of offences and penalties, with the primary aim of deterring employers (irrespective of their accreditation status with INZ) from exploiting migrant employees. Among its key provisions, is the creation of new infringement offence for lower-level breaches of employing a person in a manner inconsistent with the terms of their work visa. This carries both infringement fees of up to $3,000 per employee (which immigration Officers or Labour Inspectors can issue), and the possibility of larger court-imposed fines. There will also be ‘strict liability’ in place, so the employer will be guilty of the breach regardless of whether they can show a genuine mistake was made or where they made fair attempts to be compliant.

Other important changes that all employers need to be aware of include facilitating information-sharing between Immigration Officers and Labour Inspectors and giving Immigration Officers powers to require the provision of employment records, for example their wage and time records.

Under this legislation, infringement notices identifying employers can be published. This naming and shaming of employers creates a further deterrent  in addition to the existing stand down list for non-compliant employers maintained by MBIE.

Lastly, under this legislation the High Court has been granted the authority to disqualify individuals who have been convicted of exploiting employees and temporary workers under the Immigration Act 2009, or individuals involved in trafficking in persons offenses under the Crimes Act 1961, from serving as directors of New Zealand companies.

In summary, these changes combined represents a significant shift in workplace relations policy and will have major implications for employers and employees, including the following:

• Immigration Officers or Labour Inspectors will be able to name and shame as well as fine employers (irrespective of whether they hold accreditation status with INZ) for any breach in their migrant employee’s work-related visa conditions, even for small and accidental breaches;

• Immigration Officers will be able to more easily obtain and check employment related documents as part of ongoing compliance efforts;

• migrant employees will be able to ask Labour Inspectors to enforce their entitlement not just to minimum wages but to the wages their visa conditions stipulate.

With respect to accredited employers, there are even greater implications. Accredited employers have an obligation to notify INZ of any changes to their compliance with INZ’s accredited employer rules within 10 working days of this being identified. INZ expect that accredited employers notify them even of minor breaches (for example where a migrant employee works in a different location to the one specified in their visa conditions or where a migrant employee works for a brief period while they did not have a right to work). Accordingly, by doing the right thing and self-reporting, accredited employers will be penalised even more from 6 January. Plus, there is a risk that their accreditation status may not be renewed.

It is critical for employers to be aware of these changes and get their processes right.

Moving in the same direction as Australia

The changes coming next year for us, are already in place in Australia, with a few differences. Their experiences give us foresight, which is useful for our preparedness.

When coming into power, the current Australian Government found that the enforcement of employer breaches was lacking, so they have recently increased the resourcing of enforcement agencies.

How enforcement of the new rules will work in New Zealand and how it will be resourced is uncertain, but $50 million has been ringfenced for investigations into workplace non-compliance allegations.

Other changes happening over the next few months

Accredited Employer Work Visa (AEWV) – longer processing

Recent adjustments to the AEWV assessment approach means INZ is asking employers for additional information confirming:

1. job vacancies are current,
2. vacancies are genuine and
3. whether employers can support the migrants they plan to hire.

These requests have caused an increase in processing times for the Employer Accreditation and Job Check phases. Because of this, Job Check applications are currently taking approximately eight weeks to be processed. Employers need to plan ahead and be prepared for longer processing times.

Labour hire (triangular) employment threshold change from 15% to 35%

From 27 November 2023, there are significant changes for accredited employers who are labour hire employment firms with triangular employment arrangements, ie. where they assign their migrant employee to work with another business in specific construction occupations.

At least 35% of these firms’ labour hire workforce will need to be made up of New Zealand citizens and residents in full-time employment – an increase from 15%. This threshold is being assessed at both the Accreditation and Job Check stages. As an already accredited employer, if you don’t meet the new threshold but continued to meet the 15% threshold, you won’t lose your accreditation, although, INZ will not approve a further Job Check until you meet the 35%.

New median wage to apply from February 2024

A new median hourly wage of $31.61 will be adopted in February 2024 (date tbc). This means that most wage thresholds indexed to the median wage will be updated to reflect this, including the AEWV, the Skilled Migrant Category, and some occupations covered by Sector Agreements and the Green List.

Now is the time to get ready

Many New Zealand employers would benefit from considering implementing better standards of governance and compliance risk oversight, as well as systems for management of operational risks related to immigration and employment. The consequences of either immigration or employment non-compliance can be significant.

In particular, with The Worker Protection (Migrant and Other Employees) Act changes coming into play early in the new year, we strongly advise that employers make sure they are ready now, before we get into the busy holiday period.

With the new 0800 number enabling allegations of non-compliance to be reported easily, and an uptake in people going straight to the media, before having a conversation with their employer, employers’ understanding and implementation of best practice is crucial. Please contact us for assistance in getting ready for these significant changes.

Pitt & Moore provide expert advice on immigration, employment and visa rules and processes so please contact us for some expert guidance.

Disclaimer: The information contained in this publication is of a general nature and is not intended as legal advice. It is important that you seek legal advice that is specific to your circumstances.

Disclaimer: The information contained in this publication is of a general nature and is not intended as legal advice. It is important that you seek legal advice that is specific to your circumstances.