Employer accreditation policy changes – August 2017

Most employers will be aware that Immigration New Zealand (INZ) recently issued a very positive media release to confirm that applications for employer accreditation are now being granted for an initial period of two years, and once an accredited employer has held their (existing) accreditation for two years or more, will be eligible to be considered for a five year extension upon renewal.  This is welcome news for many of our clients who express ongoing issues with the requirement to move through a renewal process every 12 months.  While it is never appropriate to look a gift horse in the mouth, based on the new policy that has been released, this is clearly an exception to that rule.

While the positive attributes of the Employer Accreditation policy changes have been highlighted with some gusto, the real devil is in the detail of the policy that has now been fully released.  It is clear there are some quite substantial changes incorporated post August 2017.

Generally speaking, there seems to be an understanding that when employers get to grips with the Essential Skills work visa changes, and also where they will have employees who could previously have applied for residency under the Skilled Migrant Category (SMC) who now cannot, there is going to be a logical increase in Employer Accreditation applications. This is because employers will aim to secure accreditation to help create a residency pathway and soften the negative effect that the temporary work visa and resident visa changes have created, in a retention sense.

It appears that the new policy changes that have come in have anticipated that surge of new applications, and therefore INZ have “beefed up” their expectations on what they expect to be proven for employers to be “trusted partners”.

Below are the main aspects that we believe employers need to be familiar with:

Provision of false or misleading information

INZ have included a new provision stating that an immigration officer is required to decline an application for accreditation if they are satisfied that an employer provided false or misleading information in support of an application, or withheld relevant information that was prejudicial to the grant of accreditation.  The operative word here to consider is the word “will”.  There is no discretion in relation to using the operative word of “may”.  This indicates a strict liability type of offence.

Employers need to be aware of this as it is a clear message that INZ expect employers to be open and honest with all dealings with them if they are to be considered a “trusted partner”.  There may be some temptation to employers to avoid the provision of information that will create extra work (such as explaining a relatively small number of redundancies), although there is now quite a clear policy expectation that INZ want to receive all information to allow a fully informed decision to be made. Any short cuts could be met by a straight decline.

Further policy requirements

INZ have increased the requirements around an employer’s ability to demonstrate that they are in a sound financial position, has human resource policies in practices that are of a high standard, have demonstrable commitment to training and employing New Zealand residents or resident class visa holders, and have good workplace practices.

Taking each of these in turn, here are some of the new factors that INZ are now taking into consideration for each of these important aspects (among others):

Sound financial position

  • Financial indicators such as reserves, profit and equity levels;
  • Reserve capital;
  • Ability to sustain current and proposed employment; and
  • Accounts receivable.

Human resource policies and practices which are of a high standard

  • Worksafe NZ or Labour Inspectorate findings;
  • Sample Employment Agreements;
  • Evidence of HR and Health and Safety policies and procedures;
  • Whether the employer is International Organisation for Standardisation (IOS) certified; and
  • Feed back from relevant unions and other employee representatives.

Commitment to training and employing New Zealand citizens or residents

  • Whether the employer has engaged with the relevant Industry Training Organisation (ITO);
  • Evidence of training provided to staff who are New Zealand citizens or residents;
  • Whether the employer makes “genuine attempts” to recruit New Zealand citizens or residents to fill any vacancies;
  • The proportion of the employer’s workforce who are New Zealand citizens or residents;
  • Feedback from relevant unions and other employee representatives.

Workplace practices

  • Whether the employer has diversity policies and practices in place as outlined by Diversity Works NZ;
  • The extent of any non-compliance with immigration or employment legislation;
  • Where there have bee minor breaches of legislation the degree to which the employer has put in place remedies to prevent similar breaches in the future;
  • Policies and processes the employer has put in place to ensure they remain in compliance with immigration and employment legislation;
  • Feedback from relevant unions and other employee representatives.

Although these requirements tend to blend over existing requirements, employers will note with interest that some of the points listed above go far beyond previous expectations.  A number of these are not only new, but have far reaching consequences for some existing employers who hold accreditation.

Group accreditation no longer permitted

This is a change that has been signalled for a while and is therefore no surprise.  The current INZ system makes it very difficult to track employees employed under “group” accreditation, so we anticipate that even applications that are made for group accreditation as an exception to the Instructions may well be bounced back.

INZ has however been accommodating on alignment (timing) of related entity accreditation recently, and have also applied discount application processing fees where applicable, so viewed together with the extension to the accreditation period we think will make this change palatable to our clients who hold group accreditation.

Audit ability

INZ have introduced policy that allows them to order an employer to ensure they continue to meet the requirements of accreditation any time during the period of accreditation.  Therefore, we anticipate INZ would undertake some type of audit or checking process during that 5-year renewal term (similar to the renewal assessment that has currently been undertaken yearly). Audits will also no doubt be undertaken where there has been some alleged breach of visa conditions or immigration regulations.

Revocation now easier

Previously only the Minister of Immigration (or appropriately scheduled high-level managers) could make a decision to revoke Employer Accreditation status.  This is no longer the case.  INZ is now more easily able to revoke accreditation for a range of issues. The most common cause we believe we will see are issues where the employer has failed (in some respect) to comply with New Zealand immigration or employment regulations.

What about the $55,000 remuneration level?

A major point of interest is the back track by INZ on the salary level required for temporary work to residence visas.  It currently sits at NZ$55,000, and initial indications from INZ were that they would look to adjust this up to sit at around NZ$70,000.  This is no longer the case.  INZ has advised they plan to keep that salary at the present level, but will be reviewing this “next year”.

While it is a surprising for INZ to back track on this, in context it is actually not completely unexpected.  INZ would have a mutiny on their hands if they announced any significant salary adjustment at the same time as adjusting the SMC and Essential Skills Work Visa policies so much. Waiting to review this until next year is smart for two relevant reasons:

  1. They would not like to release this prior to a general election as it will attract significant push back and therefore negative media attention; and
  2. All the new policy changes will need to be reviewed prior to adjusting this rate to make sure the other adjustments have been balanced correctly.

Watch this space.  There will be a flood of new applications, and declines in this area.  They will look to slowly adjust that salary level up in line with the rates that will be adjusted every November on the SMC and Essential Skills work visa categories.

What all this means

The Employer Accreditation policy has become more complicated, will become more exclusive to push out smaller employers who will wish to gain accreditation due to the policy changes made to the Essential Skills and SMC resident visa policies hard to manage, and INZ have exchanged longer renewal terms for audit ability and real teeth to deal with non-compliance.

Employers who have not yet filed an accreditation application or are looking to renew their application, must heed these policy objectives because they will be applied rigorously during that application process  Therefore, it may be appropriate to seek professional advice and guidance to structure the application and the associated documentation that will be required to gain or renew accreditation well before the application is anticipated.

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