April Newsletter

In this edition:

Employer compliance: impact on changes to employer-sponsored work visas

Following our February newsletter discussion on employer compliance, we have seen an increasing number of articles published in the media regarding New Zealand employers exploiting their migrant workers over the last six months.

One business was ordered to pay a total of $85,000 in penalties for exploiting and underpaying a staff member by more than $103,000 over a four year period.   The Inspectorate found that over a period of nearly four year the employee was frequently working up to 92 hours per week. Another employer was ordered by the Employment Relations Authority (ERA) to pay more than $20,000.00 in penalties and unpaid wages to vineyard workers who had been paid less than half the minimum wage. The workers were paid based on each piece of work they completed.   The ERA found that the employer had taken advantage of “vulnerable” workers.

Understandably the Government wishes to stamp out migrant worker exploitation. Proposed changes to shifting the responsibility to the employers in the employer-sponsored types of work visas (essential skills, accreditation, AIP, work to residence long term skills shortage) will affect not just the employer but significantly impact temporary workers.   A consultation process on the proposed changes ended on 18 March 2019 and the result of that process is likely to be introduced towards the middle of this year.  If the changes are finalised as proposed, every migrant worker wishing to apply for any of the employer-sponsored types of work works will need the employer to obtain some level of accreditation with Immigration New Zealand (INZ) before the employer can support their visa applications.   Under the current accreditation process, one of the factors that INZ will consider when deciding whether to grant accreditation will be whether the employer can demonstrate they have a history of compliance with New Zealand’s employment and immigration laws, and this factor is likely to be more important in the new policy.

From a migrant worker’s point of view, it is clear that any employer who deliberately exploits their staff should not be granted accreditation until such time as they can demonstrate to INZ they will not breach New Zealand’s employment and immigration laws.  However, the shift of responsibility for employer to demonstrate compliance to a very high (best practice standard) inevitably means less employers will be able to gain accreditation to support migrant workers for a work visa.

Any migrant worker who would like to renew their work visa with existing employer should take steps to communicate with their employer to ensure the business has robust systems in place that demonstrate their compliance to INZ.

Lane Neave assists employers to provide workplace audit services concentrating on employment compliance as well as immigration compliance. It is a scalable product in which is affordable to employers and is suitable for those who have a grater need for review.

We strongly advise visa holders to seek professional advice now in preparation for the proposed changes.  Taking steps now will enable both migrant workers and employers to avoid the potential negative ramifications if the business is found by INZ not to have compliant systems in place, and therefore they are declined accreditation; especially so in a situation where had changes/improvements been implemented prior to application the application would have been approved.

For further information or assistance with emigration please contact Lane Neave Lawyers on + 64 3 379 3720 or email liveinnewzealand@laneneave.co.nz.

NZ’s strengthened desire for a diversified society

A loss of innocence. That perhaps is one way to describe New Zealand following the killing of 50 people at two mosques in Christchurch in the middle of March. New Zealand used to be considered one of the safest places to live in or migrate to but that has proved not to be the case.

In New Zealand we often joke about how dependent our psyche seems to be on the positive views visitors have when they come here, with a popular Friday night comedy show frequently referencing the question “What do you think of New Zealand?” So it is understandable that in the time since the shootings we have wondered to what extent the terrorist attack has changed people’s attitudes toward New Zealand.

Perhaps we could conclude that those attitudes would be newly quite negative – were it not for the fact that the reaction of our Prime Minister has been in stark contrast to the common political stances taken in other countries by political leaders following similar atrocities. The statement “They are us” may to some extent gloss over the fact that there are slight divisions within New Zealand which will remain even after the strong feeling of inclusiveness immediately after the attack passes. But the absence of any element of a revenge mentality or giving of any oxygen at all to any argument that the victims bore the slightest responsibility for their plight perhaps reveals the strong Kiwi desire for a society of acceptance and inclusion rather than enunciation of differences.

It will take potentially a long time and some tricky analysis before we will be able to say whether or not the events will have an impact on migrant flows. But to date there is no evidence of an effect. In fact as has happened for the past three months the latest migration data from Statistics NZ continue to show upward revisions to estimates of the net migration gain which New Zealand enjoys.

In the year to July 2016 the net flow peaked at 64,000 before falling to an estimated low of 50,000 in the year to June 2018. Now the net flow is back up to almost 62,000. This represents a 1.2% annual boost to the country’s population which in these terms is far greater than the peak migration stimulus Australia and the United Kingdom have received in recent years.

And this is where things get interesting. In both the UK and Australia politicians have railed against the strength of migration inflows partly in the context of ethnic issues but substantially amidst concerns about housing and infrastructure pressures – especially on roading networks. In Australian the Federal government has recently reduced its annual migrant inflow target and is trying to push migrants out to the regions and away from the major cities.

In contrast, in New Zealand while the Foreign Minister has in the past spoken out strongly against migrants as leader of a very small minority party, he has in no way used his coalition position of power to advocate for migration reductions. He has in fact even downplayed previously expressed concerns about Muslim migrants, noting the conditions at the time of Islamist attacks in years past and the focus on illogical religious extremism condemned also by mainstream Islam followers.

And in New Zealand the concerns about housing and roading have in no way manifested themselves as any popular support for the near silent arguments for restricting immigration to assist in solving these problem areas.

New Zealand remains a country and a society accepting of people from all walks of life and all parts of the globe. If anything, reaction within New Zealand to the March 15 events has strengthened our desire for such a diversified society and set of attitudes rather than boosted in any way support for the terrorist’s twisted ideology.

Article provided by Tony Alexander – Chief Economist, Strategy & Business Performance, BNZ. 


New Zealand bond market update

Global growth is slowing, but not into a recession as some commentators suggested. Central banks in US, Europe, Australia and NZ have recognised the situation and have been putting interest rates on hold. While the NZ Official Cash Rate (OCR) is on hold, markets are expecting rate cuts, but the timing is data dependent. For immigrant investors, if you already have a bond portfolio, you should have seen benefits from above conditions. There are about NZD2.6 billion corporate bonds maturing from May to July. We expect a large portion of fund would look to reinvest in the bond market and new bond issues are coming to market.

Both equities and bonds prices have been strong in this low interest rates environment.  If you are a new investor to the NZ market and must invest in NZ assets to gain your residence visa, a diversified bond portfolio is still a very good relative low risk option, as part of or 100% of your immigration portfolio. The economy is still growing, just at a slower pace. Majority of business are doing well. We don’t expect large scales credit risks (credit risk – companies can’t pay interest or principle to their bond holders). When you buy bonds you would have known the yields and expect to be paid coupons during the remaining life of the bond and the principle at the end. During the lifetime of the bond, the price might go up or down due to market condition changes and affecting your portfolio performance but if you hold them to maturity, the total return is still the same yield to maturity % at your purchase date.

You don’t have to sit on the same portfolio for 3-4 years. It’s good to review your investment goals and objectives at least every 3 – 6 months to ensure your portfolio is aligned with the goals and objectives and adjust to changing conditions if required. For example, for most migrant investors, when you establish the portfolio, you are considered as an overseas person and are not eligible for new bond issues. This would change when you move to NZ.

To better manage liquidity and risks, it’s good to obtain professional advice before investing. For migrants in an investor or investor plus programme, their liquidity requirement is largely constrained by immigration requirements. The liquidity of the corporate bond market varying from issue to issue. While the key information of each bond is similar, credit rating, yield to maturity, expected call date/maturity date, coupon rate etc, I have not had any investor request for the original product prospective. Each bond still has differences in their fine prints in the product prospective Those fine prints shaped the risk profile of each bond. It’s important to ensure your bond portfolio’s risk profile match your investment risk profile.

In addition, some migrant investors are not considered a NZ tax resident. A lot of countries have double tax agreements with NZ. They normally pay 10% on coupon interest as tax deducted at source, which they normally can claim against the tax filing in their own countries. Some elect to pay 0%-2% tax, which they normally can’t claim against the tax filing in their own countries. An investor had specifically required me to construct a bond portfolio consisting with only 0% tax bonds.

Article provided by Ally Cui – Director, Private Wealth Adviser, JBWere 

Ally Cui can be contacted on Ally.Cui@jbwere.co.nz or +64 (9) 365 0888.

Low unemployment leads to skills shortage

Recruitment activity remains buoyant throughout New Zealand, thanks to strong infrastructure needs throughout the country, on-going residential construction and new commercial builds.

There are good levels of vacancy, especially in the regions due to low unemployment. This, in-turn, is leading to high demand but a shortage of certain skilled professionals.

The skills we have found in most demand for the first quarter of 2019 have been:

  • Skilled and competent Registered Electricians, Registered Plumbers, Carpenters and Roofers
  • Revit and ArchiCAD Technicians who are proficient in creating detailed construction documentation
  • Experienced Project Managers, Site Managers and Estimators
  • Structural Engineers especially with proven seismic project experience
  • Civil Engineers with experience in land development and subdivisions and Storm water and Three Waters Engineers
  • Facilities Managers with proven project management experience and HVAC Maintenance Technicians
    Team Administrators, Project Coordinators and Personal and Executive Assistants

Article provided by Steve Baker – Enterprise Recruitment and People.

Enterprise Recruitment and People has a national presence. We remain interested in providing obligation free advice to offshore candidate’s about their chances of securing employment in New Zealand. Steve can be contacted on steve.baker@enterprise.co.nz or 00 64 3 3530680.


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