Employers Take Note : Major Immigration Compliance Changes Coming in on 1 April

Immigration New Zealand (INZ) has announced the implementation of a very tough new policy that has the potential to have a significant operational impact across a range of New Zealand employers.

From 1 April employers who have incurred an employment standards-related penalty will be banned from recruiting migrant labour for a defined stand-down period ranging from six months to two years, depending on the severity of the case.

These standards-related penalties extend from formal infringement notices issued by the Labour Inspectorate (following a Labour Inspectorate investigation), through to penalties issued by the Employment Relations Authority or the Employment Court, to a declaration of breach or banning order issued by the Employment Court. Importantly, and of significant note for employers, penalties as a result of private actions taken by employees either through the Employment Relations Authority or the Employment Court will also be included.

While INZ has confirmed that the threshold for non-compliance will not include employers at the very minor end of breaches (including those who have entered into an enforceable undertaking with the Labour Inspectorate), the implementation of this new policy covering standards-related penalties will create a significant operational risk to employers; particularly those who have a large portion of their work force on work visas or those who rely heavily on migrant labour to supplement their New Zealand workforce. That is because not only will non compliant employers be stood down from hiring new migrants during the specified stand-down period, existing employees of that employer on work visas will not be able to secure an extension of their work visa if the visa expires during stand-down period, so those employers stand to lose existing employees as well.

INZ have advised that they will publish guidelines and criteria to ensure that stand-down periods are applied fairly, consistently and transparently, but our view is that the policy will be very difficult to manage. That is because the only way to apply the policy fairly and with consistency would be to create strict liability, where mitigating factors either for cause or addressing the issue to prevent repeat non –compliance would not be taken into consideration as they are too subjective. What seems to be proposed here is a formidable heavy stick that could have a significant impact on many good employers where a breach has occurred by mere human error.

The Minister of Immigration (Michael Woodhouse) has advised around the release of this policy that “Access to the international labour market is a privilege, not a right and if employers abuse that privilege by exploiting migrants or failing to comply with employment law, there will be consequences”. It will be very interesting to see whether this policy does indeed impact those employers, but more importantly, others that you normally would not categorise in such a statement.

How the changes could impact your business

It is important to be aware that even if you have existing systems and processes in place for ensuring your business is compliant with New Zealand’s immigration law, there are a number of areas where there is a risk of non-compliance which could trigger the stand-down period being imposed.

Many of the employers that we have assisted with issues of non-compliance that would now potentially be caught by this new policy are in fact “good” employers, with “good” systems. However, given the complexity of the system, the reality is that it is easy for employers to misunderstand exactly what their responsibilities are and/or for a business’ internal systems and processes to be unfit for purpose when it comes to ensuring their employees are immigration-compliant. In these situations, the new policy would mean that the employer could be subject to the stand-down period.

As a starting point, we recommend that employers undertake a review of their internal systems and processes for managing immigration compliance, across the areas of: recruitment, capturing and storing evidence of employees’ right to work in New Zealand, managing compliance issues triggered by changes to terms and conditions of employment and tracking of visa expiry dates.

The Lane Neave workplace law team has substantial experience supporting employers in the area of immigration (and employment) compliance. This support usually starts with assisting employers to gain a full understanding of what their responsibilities for ensuring immigration compliance are. Following that, we also provide comprehensive support with designing, implementing and continuously monitoring systems and processes that meet their compliance obligations as employers, while remaining business-appropriate. Get in touch today to discuss how we can assist your business to manage compliance with this new strict regime.