In this edition:
- Tough new labour market testing guidelines for work visa applications
- Border closure exceptions
- April’s plunge from Q1 cliff
- New Zealand bond market updates
- Demand remains for workers
- Helping expats and migrants cope with the COVID-19 world
Tough new labour market testing guidelines for work visa applications
As predicted in our recent articles, webinars and comments, Immigration New Zealand (INZ) has now issued specific advice and guidance to their visa processing staff on ‘labour market testing’ (LMT) and ‘employment sustainability’ requirements for Essential Skills work visa applications. This guidance applies to applications that have already been lodged with INZ and are still being processed as well as for any future applications, so everyone is caught by this, even people who submitted their applications weeks before New Zealand entered lockdown.
Labour market test requirements
Most readers will be aware that one of the most commonly used visa categories in New Zealand is the Essential Skills category which relies on employers testing the local labour market, usually via advertising, interaction with Work and Income (WI) and other appropriate measures, in order to ascertain whether suitable New Zealanders (citizens or residence class visa holders) are either available or readily trainable to perform the role offered to a migrant worker. The onus here lies on the employer who must make a genuine attempt to attract and recruit suitable New Zealanders and through that process ensure that a New Zealander is not available before supporting a migrant’s visa application.
To date, INZ’s approach to such applications, specifically to the LMT part of the process, has been relatively ‘balanced’ with the category generally being used successfully to supplement the regional and national workforce with migrant labour where low unemployment levels made it difficult for employers to attract skilled staff. This is clearly about to change in a major way.
The internal directive released by INZ, on the face of it, appears fairly “stock standard” although the devil is clearly in the detail and confirms our prediction that all employees seeking a work visa under this category, as well as their employers, face significantly increased uncertainty when making an Essential Skills work visa application in this post COVID-19 immigration landscape.
The underlying premise for this directive is also very clear. As New Zealand businesses lay off staff, the pool of unemployed skilled labour increases and consequently the prospect of an employer finding New Zealanders to perform work previously undertaken by a migrant worker should also increase. In addition this is enhanced by the thousands of New Zealanders who have returned home after living overseas and are now also looking for work. This means that if there is a chance that a suitable New Zealander is either available, or readily trainable, to perform a role on offer, they must be given preference and significantly increased consideration over a migrant even if the migrant has been working for the employer for a number of years. In short, applicants and employers should brace themselves for much greater scrutiny on the LMT part of the application process and consequently an increased likelihood of Essential Skills work visa applications being declined, especially if the application process (and the supporting documentation) is not managed carefully at the very outset.
We summarise some key aspects of INZ’s new approach to the LMT below with some thoughts on how to manage potential risks and other factors to consider.
INZ’s directive states that immigration officers must be satisfied, at the time of assessing applications, that there are no suitable New Zealanders available to perform the role. To do this, they may (most likely will) ask employers for updated information about the availability of New Zealanders for the role on offer.
In the past the LMT undertaken by an employer was valid for the purpose of supporting a work visa application for three months from the date a position was advertised. Going forward, INZ will be undertaking what seems to be a ‘real time’ assessment of the LMT process and will likely not be satisfied with the results of a LMT completed more than a few weeks prior to the date of assessment. The rationale here is that the conditions of the local labour market may have changed since the original LMT was undertaken and due to COVID-19 a new assessment is now required.
Practically this means that in some situations employers may have to undertake another LMT to support the application. This can include, but is not limited to, posting a new advertisement, obtaining a new ‘Skills Match Report’ from WI and obtaining up to date advice from relevant stakeholders within a particular industry including unions etc.
INZ explains that the type of evidence or information requested by them will vary according to the role offered, the region of employment and the circumstances of the employer. Note however that immigration officers are not permitted to specifically request the employer to re-advertise a role but have carefully suggested instead that employers may choose to do this if the officer is not satisfied with the LMT already undertaken. In our view an employer would be foolish not to re-test the labour market if questioned by INZ.
The messaging here is clear. Keep on top of your LMT. Actively test the labour market so you have up to date information on hand to demonstrate that there are no New Zealanders available or readily trainable for the role on offer. We have even advised some of our clients who have an Essential Skills application pending with INZ to complete another round of advertising in case this is requested by INZ when the application is ultimately processed. The reality is that unemployment rates across New Zealand are quickly increasing and the situation is only going to get worse when the Wage Subsidy Scheme ends. Therefore, it is quite likely that an LMT undertaken now will be more favourable than one undertaken two months later and will therefore benefit the application significantly.
In addition, INZ have also stated that no work visas will be granted under the Essential Skills category for ANZSCO skill level 5 (lower skill level) occupations unless the employer is able to demonstrate to the satisfaction of an immigration officer that no New Zealanders are able to be trained to do the work. This is a clear message that the importance of the requirement to consider those New Zealanders who are ‘readily able to be trained’ will have increased significance in this new labour market. In essence it is going to be exceptionally difficult (if not impossible) to secure a work visa for an occupation in ANZSCO skill level 5 unless one is issued as an exception to the Instructions.
It is also important to note that if a visa applicant is based onshore, INZ must provide the applicant with an opportunity to comment and provide any information the applicant considers relevant before a final decision is made. Offshore applicants will often not get this opportunity for a response and a final assessment can be made on the information INZ have on hand at that time. It is therefore extremely important for applicants to provide accurate, full and detailed relevant information at the outset when the application is submitted, in order to reduce the risk of decline and mitigate the associated expense, stress and uncertainty created by the process.
Similarly, those employers who are familiar with the LMT will quickly see that this new enhanced ‘LMT on steroids’ approach requires a carefully considered and technically sound strategy from the very outset of the application process. The old approach will simply not cut it. Some of our employer clients have voiced concern that their old ‘tried and tested’ approach to the LMT may not work going forward and we absolutely agree. We have already started working with employers on factors to mitigate this risk going forward and are actively advising on things like the wording of advertisements, timing and duration of placing advertisements, interacting with relevant stakeholders and reviewing recruitment and screening and selection processes, resulting outcomes and employment documents. This includes assisting our applicant clients by engaging with their employers and assisting those employers too with improving their support documentation and processes.
Ongoing and sustainable employment
In addition to the enhanced LMT approach, INZ has also said that they will also place greater emphasis on assessing whether an offer of employment is genuine, sustainable and full-time for the duration of the employment offered. They explain that the fact that an employer receives funding from the COVID-19 Wage Subsidy Scheme does not by itself indicate that the employment offered is non-genuine, unsustainable or full time, however to mitigate any uncertainty, the directive to immigration officers is that they must ask employers to confirm genuineness and sustainability. While not stipulated in the directive specifically, this confirmation could potentially take many forms including, but not limited to, providing financial information such as annual reports, bank statements, tax records, company office records, and information like whether the employer has taken the wage subsidy and whether any redundancies have been made.
To reiterate our earlier advice, now is a good time for both prospective visa applicants and their employers to get a good understanding of the changing immigration landscape and to set realistic expectations as to the likelihood of securing further work visas. In our experience new or updated immigration policies are usually applied by immigration officers more stringently and conservatively when they are first released with the approach easing over time as both the applicants and the officers adjust to the assessment process and lawyers like us challenge decisions to get the bar down to a reasonable level.
Clearly the post COVID-19 immigration environment is unprecedented and with the anticipated longer term ‘hit’ to New Zealand’s economy and resulting unemployment rate, the adverse impact of a toughened LMT may last a lot longer than previous labour market contractions we have advised on. Practically, this means all of those pursuing an Essential Skills work visa must be prepared for increased scrutiny and potentially a higher chance of a declined application.
It is not all ‘doom and gloom’ however as it will still be possible to secure work visas with careful planning/preparation and correct advice sought right at the beginning of the application process. It is better to invest the time and effort to get it right from the outset as it is much more difficult to address concerns once INZ has challenged an application.
If you require assistance or guidance with an application, whether you are a migrant employee or employer, please reach out to us. We have extensive experience in dealing with tight labour markets and are already pooling our large team’s capability in preparing precedent documents and approaches that meet the new challenge head on at lodgement. It is always easier approaching an application like this at the start, rather than coming in half way to try and fix an issue at that stage, but if you find yourself in that position contact us and we will advise as to whether we can assist in securing that challenged visa.
For further information or assistance with emigration please contact Lane Neave Lawyers on + 64 3 379 3720 or email email@example.com
Border closure exceptions – do not accept decline decisions at face value
Have you made a request to enter the country as an exception and had the request declined? We have been successful at having some of those declined decisions overturned. If you have had an application refused here is our advice on the exemption regime and our experience to date on challenging some of those decisions.
On 20 March 2020, in response to the COVID-19 pandemic, New Zealand closed its borders to all but New Zealand citizens/residents and those who meet the highly restrictive criteria of being granted an exception. The result is a strict travel ban to New Zealand, preventing even those who hold temporary visas and “not yet activated” residence class visas, from entry or the ability to return to their lives in this country.
At the moment, exceptions to the border closure are only being granted on a case by case basis to the following individuals:
- Partners, dependent children (aged 24 years and under) and legal guardians of New Zealand citizens and residents
- Australian citizens and permanent resident who normally live in New Zealand
- People with one of the following critical purposes in New Zealand:
- Essential health workers
- Other essential workers who are specifically agreed to by the New Zealand Government
- Samoan and Tongan citizens making essential travel
- New Zealand-based partners and dependent children (aged 19 years and under) of a work or student visa holder who is in New Zealand
- Critical humanitarian travel
Despite the challenges brought about by COVID-19, it is important for Immigration New Zealand (INZ) to act in line with the well-established legal obligations they have to not only give due consideration to the circumstances of each application for an exception to the border closure, but also to act in line with their obligation to make decisions in an a manner that is consistent with the overarching principles of fairness and natural justice.
Since the border closure, INZ has declined around 80% of the entry requests presented to it and it has now become apparent to us (from our recent experience with making these requests on behalf of a number of clients), that INZ’s decisions are not always consistent and, importantly, that many of the decisions are made in a manner that is in breach of INZ’s own guidelines and in breach of the principles of fairness and natural justice in general.
Examples of INZ’s failures in this respect include failures to properly consider the merits of each request for an exception and failures to properly record and communicate the reasons for their decisions, especially so when people are applying for visas under the critical humanitarian exception category.
Many reading this article would have experienced these failures first-hand by receiving a decision to decline from INZ without knowing exactly ‘why’ that decision was made.
In recent days our team has assisted a number of clients in making further enquiries with respect to the declined decisions they received from INZ and, upon engaging with management at INZ (and pointing to the legal failures in their decision-making process), we have been able to assist in over-turning a number of these decisions, resulting in those clients being granted permission to travel to New Zealand.
Our message to affected individuals therefore is that decisions should not simply be taken at face value. Applicants have the ability to have these decisions reviewed and our team of experts stands ready to provide advice as to the correctness of INZ’s decisions and, if appropriate, to engage with management at INZ in an attempt to have the declined application revisited.
One of the reasons that we have been successful in having decisions overturned and in gaining success with first-time requests is our ability to present the information to INZ in a compelling way. The way that the request information is presented to INZ and the details included will be ‘make or break’ to the success of the application. Our team are experts in this process and will make sure that your request is prepared in order to give you the strongest possible chance of securing a positive outcome.
Should you feel that your application to request entry as an exception to the border closure was not dealt with fairly by INZ or if you would like our expert advice and support in presenting your case in the strongest possible way, please feel free to get in touch with us before giving up entirely.
For further information or assistance with emigration please contact Lane Neave Lawyers on + 64 3 379 3720 or email firstname.lastname@example.org
April’s plunge from Q1 cliff
With last week’s Monetary Policy Statement and Budget all said and done, this week’s focus will return fairly and squarely on the economic data. Friday’s retail trade report might take a bite out of thoughts of a steady Q1 GDP. And, the range of data for April will hammer home the maximum lockdown that the country went into that month.
That Q1 activity might have held together would at least be a decent starting point, when a lot of other countries experienced clear GDP contractions over this period. New Zealand’s Q1 employment and hours-worked outcomes offered respite in this regard, as did last week’s news that ready-mixed concrete production was relatively steady for the March quarter.
And this morning’s population estimates for the March quarter accelerated. This was in keeping with the spurt of net inward migration that occurred month to month, as people responded to the coronavirus and its looming impacts on border control. So, it wasn’t so much the fact New Zealand’s population cracked 5 million in Q1, but that its annual increase pushed up to 2.0%, from 1.7%. But from this it’s a matter of buckling up for the degree of deceleration and plunge in the data.
There will probably be just faint cracks in Friday’s retail trade report for the March quarter. We anticipate a 2.5% fall in its volume, based on the monthly electronic card transactions (ECT). It could easily be a bigger drop, however, if expenditure on vehicles falls by more than we figure on (something not covered very well in the ECT data).
We mention this knowing that vehicle registrations had already dropped about 30% in March. April will no doubt register a bigger drop, and those figures are due tomorrow.
As it is, we expect the volume of retail trade in the June quarter to dive a seasonally adjusted 27%. This relies on turnover in May and June bouncing back, to some extent, from a dreadful April. We might yet be disappointed on the degree of bounce, even though New Zealand is gradually moving down the lockdown scale. We are scouring the weekly spending indicators with this risk in mind.
This morning’s Performance of Services Index (PSI) certainly underscored the extent of suffering in April. Its 25.9 reading was roughly as low as we witnessed for the PMI (26.1), although neither should have been surprising. A sizable rate of contraction is what you get when businesses are largely forbidden from operating.
There wasn’t a great deal of variation across service industry type, with all registering very low readings for April (in unadjusted terms) – within a range of 10.6 to 33.3.
When it came to firm size, there was virtually no variation across headline readings, with a remarkably tight range of 23.1 to 24.0 across the four groupings. This underscores that the pain is indiscriminate and that scale is no assurance of doing relatively well.
If there was any good news in the latest PSI, it’s something we also saw in the PMI; a relative resilience about staffing. Not a positive one, for sure, but a lot less negative than other aspects of the survey. In the case of the PSI, its employment index came in at 42.1 for April. The PMI equivalent was 41.2. Combined, they suggest the rate of job cuts in April was limited.
This, along with the rate of weekly increase in jobseeker benefit numbers, is consistent with our view the NZ unemployment rate will rise to just above 6% in Q2.
However, none of the latest data dissuade us of our view the jobless rate will hit about 10% by the end of the year, as firms are ultimately forced to face underlying realities and the wage subsidy expires. And if the unemployment rate doesn’t get that high, it will likely reflect diving participation in the labour
market (as Australia’s employment report for April alluded to), rather than a lack of weakness in employment.
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New Zealand bond market updates
Bonds are an important asset class in the majority of investors’ portfolios. Bonds provide a steady income stream through regular coupon interest payments, and, bond value is relatively stable compared to the equity value. New Zealand bonds are part of the acceptable investment under the New Zealand investor visa programme.
With the COVID 19 outbreak and the lockdown measures taken around the world, the economic damage is slowly unfolding. Bond markets have had a rough ride in the last three months. Back in March and April, the share market had a sell off, the bond market became disfunctional due to the dry up of liquidity (not enough buyers) and concerns of a large-scale default risks (many companies don’t repay back their debts). The good news for the bond market is that unlike the Global Financial Crisis, central banks and governments have stepped up very quickly and provided various policies to support the economy and assist companies to survive. With all the economic stimulus policies in place, the concern of a large-scale default risk has reduced. As part of the Reserve Bank New Zealand (RBNZ) policy response, they have started the government bond buyback programme, which has provided much-needed liquidity in the market. The bond market has started to function again.
Where will the NZ bond market go from here? What does it mean for overseas investors?
From an investment return prospective, the central government bond returns are so low, after fees, the net returns from a yield to maturity prospective would be negative. Local government, councils and high-grade company bond are in high demand, because they still provide positive returns with not too many risks. High yield bonds now provide even higher yield returns compared to three months ago, but they represent less liquidity and/or higher risk. RBNZ has indicated a negative official cash rate is an option in the future and will continue the government bond buyback programme, both would help to drive up bond price and drive down bond yields in the near future.
From a bond availability prospective, as a result of the economic disruption of the last three months, listed companies were opting for issuing new equity instead of new bonds. There have been no new bond issues in New Zealand in the last three months. New bond issues from the government and corporates should come on to the market to increase bond supply at some point in the future. Investors may find it easier to invest in a diversified bond portfolio then, than they do now.
The role of New Zealand bonds in the immigration portfolio has not changed but most overseas investors are not familiar with the New Zealand bond market and most of the issuers. Sorted by credit ratings from international credit agency, such as Standard & Poor’s, yields, maturity dates may help to simplify the investment decision making process, but it would also narrow the investment options and may or may not lead to the most suitable outcome for an investor’s specific needs and wants. I recommend prospective investors to seek professional advice.
Ally is an Authorised Financial Adviser and her disclosure statement is available on request and free of charge from http://www.jbwere.co.nz. The information contained in this article is of a general nature only and does not take into account the particular investment objectives, financial situation, goals or needs of any person.
Demand remains for workers
The impact of the NZ Government’s COVID-19 lockdown response over the past two months has been severe, especially on the employment market.
A decrease in job advertising accelerated in March and April, with 85% of all job sectors on SEEK having seen a drastic drop in listings advertised. The unemployment rate is projected to rise to somewhere around 10-15% of the NZ workforce. This will have a significant on going impact on the NZ economy.
However there remains demand for workers within certain sectors and regions. New Zealand boasts an impressive primary sector that continued to function even during the lockdown.
Four industries demonstrated growing demand:
- Community Services & Development (16.0%)
- Government & Defence (8.4%)
- Farming, Animals & Conservation (3.2%)
- Banking & Financial Services (1.6%)
Industries showing the greatest decline in job ads were:
- Engineering (-24%)
- Science and technology (-22.8%)
- Sales (-21.9%)
Call Centre & Customer Services (-19.4%)
- Construction (-18.8%)
Three regions saw job ad growth:
The rest of the country experienced a decline.
Those areas hardest hit were:
- West Coast (-20.3%)
- Canterbury (-18.7%)
- Bay of Plenty and Marlborough (-12.6%)
- Auckland (-11.8%).
The average advertised salary in New Zealand is $82,576, up by 3.4%
The New Zealand borders will remain closed for the foreseeable future which will place increasing demand on the human resources currently within New Zealand.
Increasing unemployment in New Zealand will result in pressure on all NZ businesses to train and upskill New Zealanders.
It will also place an increased premium value on the those high performing migrants already here in New Zealand.
The shortage of skilled staff across many sectors and regions will not be a quick fix and as such opportunity will grow in my opinion, especially in those sectors and regions that traditionally have had skill shortages.
New Zealand continues to develop a growing profile as a destination of choice amongst tourists and foreigners looking for a safe haven in these extraordinary times.
NZ’s Immigration policy continues to evolve to not only protect the New Zealand but also elevate NZ’s status in the World as a destination of choice.
Foreigners considering emigration and interested in New Zealand should start planning to ensure they are well positioned for when the New Zealand borders do reopen.
Seeking quality advice in terms of both NZ Immigration policy and processes, along with potential employment opportunities is critical.
Article provided by Steve Baker, Enterprise.
We remain open for business and offer a complimentary CV review service and feedback on your employability in the New Zealand market.
We can be contacted via Steve Baker on +64 27 212 5483 or email@example.com
Helping expats and migrants cope with the COVID-19 world
Wellbeing issues are coming to the fore as New Zealand’s lockdown period winds down. Expats and migrants have a unique experience of COVID-19. Understanding this will help both individuals, and their employers, gain perspective on how they may be feeling as life enters the next ‘new normal’.
Living away from your home country during COVID-19 can be tough.
Life is typically more uncertain for expats – but this is amplified in the current environment. The looming recession threatens jobs, with downstream effect on visa status and ability to remain in NZ. Concern about forced repatriation causes huge stress on individuals and families. The future is unclear for many expats and migrants to an even greater degree than for New Zealanders.
Most internationals are separated from loved ones and don’t know when/if they will see them again. There are harrowing stories of Kiwis unable to be with dying relatives in the same city, but relief will come as restrictions ease. For expats and migrants, this situation will continue as long as borders are closed, and flights restricted.
The Human Rights Commission reports a spike in racism due to COVID-19. This will put added stress on migrants as they start to move about more freely again, and could be a worry for parents sending their children back to school.
But expats and migrants also have some superpowers for navigating the current environment. They may in fact be better prepared for this situation than many other people.
Choosing to move countries is a way of seeking out change. International relocation builds prior experience of uncertainty, transitions, sudden and big changes. Expats and migrants have faced these challenges before and have a reservoir of emotional and practical tools to call on.
Expats and migrants are resilient, ﬂexible and willing to adapt. Some of our clients have compared going into Level 4 lockdown as akin to arriving in a new country where you quickly need to adopt to a whole new way of life – even activities Kiwis previously took for granted like supermarket shopping were completely different with limited hours, queues and product shortages. Newcomers to NZ were able to go with it more readily than some Kiwis whose lifestyle was very settled and established.
Living offshore builds coping strategies for isolation and connecting online/long distance. Our clients felt they had already been through a period of social isolation on arriving in NZ without knowing anyone. They learned that this would not last forever, and how to be happy with their own company. All skills now serving them well. And while most Kiwis have discovered Zoom and Netflix parties only recently, people who’ve lived away from loved ones for many years are already adept at establishing and maintaining online relationships and have transferred these skills to the WFH environment.
Employers, we hope these insights will be useful to you as discussion points with your expat and migrant staff as you support them through this difficult time.
And for individuals, it’s easy to focus on the stresses of being an expat or migrant in the current environment – where so much is beyond your control. But we hope this article will highlight the unique strengths and past experience that will help you get through.
Article provided by Bridget Romanes – Principal, Mobile Relocation.