Duration of Essential Skills visa temporarily doubled for low-paid workers

Government temporarily doubles the duration of the Essential Skills visa to two years for migrants with jobs that pay less than the median wage

16th Jul 21, 5:00am by Jenée Tibshraeny

Kris Faafoi.

The Government is tweaking migration settings to make it easier for businesses to continue employing some migrant workers.

It is doubling the duration of the Essential Skills visa to two years for migrants with jobs that pay less than the median wage.

Migrants with Essential Skills visas paid more than the median wage can already stay for three years. No changes to their visas are being made.

Essential Skills visas are available to anyone who is offered full-time employment (30+ hours) in New Zealand and can meet other eligibility requirements. The majority of Essential Skills visa holders work in the services sector - tourism, hospitality and retail.

The Government expects the change to provide more certainty to around 18,000 Essential Skills visa holders paid less than the median wage.

The change will take effect on July 19 and be temporary.

The application process for Essential Skills visas will also be simplified for workers remaining in their current roles.

Employers won’t be required to complete a labour market test where a worker is applying for a visa for a full-time role, which the worker already holds. These applicants also won’t need to provide medical and police certificates to Immigration New Zealand if that information has been supplied previously.

A labour market test will still be required where employers are filling a job vacancy to prove there are no New Zealanders available before a migrant worker can be hired. This is in line with the Government’s objective to ensure Kiwis are prioritised for jobs.

“These changes complement the recent extension we granted for around 10,000 Working Holiday and Supplementary Seasonal Employment visa holders,” Immigration Minister Kris Faafoi said.

Faafoi said the new Accredited Employer Work Visa, which was due to come into effect on 1 November, will be delayed until the middle of next year.

“The Government remains committed to the Accredited Employer Work Visa, which will ensure work visas issued reflect genuine regional skill shortages and strengthen labour market testing. However, we expect most Essential Skills visa holders will apply for this two-year visa, meaning the implementation of the Accredited Employer Work scheme would not be viable because of likely low uptake,” Faafoi said.

“Our long-term vision for immigration settings is to grow talent here in New Zealand and build a more self-reliant labour market.

“The Government’s $320 million targeted investment for free trades training, which has helped just over 144,000 people into training in the past year, is part of that vision.

“We want to work with sectors and see them develop plans to attract, train and upskill Kiwis into roles, and invest in productivity changes that can help them move away from a reliance on low-paid and low-skilled migrant workers. Many sectors and employers are already looking at how to make those shifts as a result of COVID pressure on the supply of workers.”

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28 Comments

by CWBW | 16th Jul 21, 6:10am 1626372611

Finally the government is responding to the realistic and challenging environment many businesses face. This policy direction comes just in time when employment expectations and business sustainability are experiencing a chasm of divergence due to the pandemic. It only make sense that businesses remain operating that we are able to gradually transition them into employee centric and conscious entities in the future.

by Burni | 16th Jul 21, 7:45am 1626378307

And most of those visas are in the "growth areas" of tourism hospitality and retail.

These should be filled locally. 160000 on Jobseeker

by Advisor | 16th Jul 21, 9:16am 1626383765

We're stuck in a vicious cycle that no political party has the gall to break:
Once low-paid hospitality workers gain permanency in NZ, they realise there isn't enough earning potential in the sector to afford a mediocre lifestyle in this high-cost country. Most don't have the skills to do much else, so end up opening their own hospitality businesses, which can only function with yet more low-paid migrant workers.

by lastlegs | 16th Jul 21, 6:21am 1626373290

maybe we should change the visa title from essential to pragmatic,if their jobs are absolutely necessary why are they being paid less than the median wage?

by Nifty1 | 16th Jul 21, 6:29am 1626373779

Encouragement of low wages continue, whilst cost of living continues to increase...

by Burni | 16th Jul 21, 8:56am 1626382561

Sub median wage migrant workers will likely attract the full range of supplementary government income support like WFF and accommodation?

by Advisor | 16th Jul 21, 9:49am 1626385762

We look like fools when you consider the fact that low wage migration in NZ has actually driven living costs up.

Housing costs have undoubtedly risen out of proportion but even takeaways and lattes are more expensive than they were a decade ago.

Step aside 'Think Big', we have a new policy failure called low-skilled migration that tops the charts!

by Jarlaith | 16th Jul 21, 7:15am 1626376551

The virulent anti-immigrant rhetoric that placates voters never seems to correspond with the policies, which maintain the neoliberal status quo.

by nktokyo | 16th Jul 21, 7:49am 1626378567

Everyone wants supermarket workers to be paid $40/hr and their bread to cost $1.

by CourtJester | 16th Jul 21, 1:20pm 1626398432

How much would bread cost if supermarket workers were paid $25/hr? I saw a calculation the other day re fruit picker wages and the price of apple. The conclusion was something like +2 cents per kg if the wages were *doubled*.
(BTW I usually buy keto 'bread' for $7)

by pacifica | 16th Jul 21, 11:22pm 1626434557

That is cheap bread, mine costs $8.50 for half the size of a normal loaf. By comparison our homemade bread costs more due to lacking economies of supply and needing different baking mixes. I think those able to get $3.50 bread at normal size don't know how lucky they have it. BTW where do you get the $7 bread?

by scarfie | 16th Jul 21, 8:22am 1626380554

Why do we need workers when all we need to do to be rich is buy and sell houses to each other.

by nigelh | 16th Jul 21, 8:23am 1626380613

"The majority of Essential Skills visa holders work in the services sector - tourism, hospitality and retail. "
I'd rate most of these as semi-skilled. There are far too many cafes, restaurants, bistros whatever you like to call them. At least a 1/3rd could fall by the wayside. Judging by the whinging that goes on by the hospitality industry that they can't find suitable staff, those from closed down hospitality businesses will find employment in the remaining.

by Burni | 16th Jul 21, 8:54am 1626382455

There's also a threshold beyond which people won't buy their 1/2 strength Chai latte with trim.

by Passerby | 16th Jul 21, 9:00am 1626382817

Agree there are just way too many cafes. We definitely don’t need that many.

by Advisor | 16th Jul 21, 9:27am 1626384450

The international study route has allowed business to suppress wages and overcrowd the hospitality sector.

Market consolidation could allow businesses to pay higher wages at modest prices while earning a tidy profit.

by Davo36 | 16th Jul 21, 9:25am 1626384303

How can workers that get paid less than the median wage be essential? If they were essential then surely they have some skills of some sort which can't be obtained locally.

And so if they have specialist skills, they should be paid a decent wage, like well above the median.

by CourtJester | 16th Jul 21, 9:44am 1626385477

They're essential for the business owner to make profit without them having to fix their failure of a business.

by Advisor | 16th Jul 21, 9:51am 1626385913

Yup - you think monetary easing creates zombie businesses, check out the number of shoddy businesses this Labour-National 'population easing' experiment supports.

by Anzac888 | 16th Jul 21, 9:52am 1626385976

Shhhhh! Don't think too much. This, and previous governments have encouraged business to low ball wages for decades. What a joke. Australia and NZ were founded on the belief too have equity/fairness/egalitarian built in to our societies. It was a new country miles away from the exploitation of workers in industrial England. Now we are importing "Essential" workers from less developed societies to do the jobs that we think are a little hard or difficult or Low Paid. America has its Mexicans as a workforce in California and surrounding States. NZ imports low paid workers to exploit. I think that this is wrong. How about using this time to reset the workforce and let market forces decide salaries. Fixed population, Less immigration, shortage of labour, then wages must rise to meet Employers demand for workers. If business cannot survive, so be it. Marginal businesses should be allowed to close. These businesses want it both ways. Nationalise the losses, and privatise the profits. It should be choose one. Don't rely on government funds to subsidise your firm.

by Believer1980 | 16th Jul 21, 10:42am 1626388979

I think your assumption that wage must goes would need rigorous analysis. The possibilities are that the existing business are exploiting their labour by underpaying them (i.e. business would still be reasonably profitable if higher wages are paid) or that business are already running on tight margins where higher wages (increasing lower wages will ought to have a flow on effect to higher wages) would be infeasible. Worded in another way, if the question is how profit is distributed (more profit going to capital owners and management than to work force) then it would be viable to assume that increasing wages will affect how profit is distributed, However if profitability is dependent on low wages, then the enterprise will go.

by WestieAJ | 16th Jul 21, 11:06am 1626390406

Those on essential skills visas are going to be trapped working for their current employer on crap pay. As a result of the worker shortage. Employers looking for more staff are going to be forced to pay more. But if they want to hire an existing essential skills visa holder they will need to jump through the hoops to prove no existing "Kiwi" workers to fill the role. So the essential skills visa holder will be likely passed over in favor of someone with automatic right to work that is tempted by the higher pay on offer. Should be open season for anyone to employ those essential skills visa holders. No "kiwi" worker test. The exploiters will be driven out of business and a rising tide will float all boats.

by Lapun | 16th Jul 21, 11:59am 1626393551

""Essential Skills visa to two years for migrants with jobs that pay less than the median wage"". How on earth can it be both 'essential' and below average?? Recipe for exploitation. How a party that tolerates this has the nerve to call itself 'Labour' is completely out of my comprehension.
https://www.nzherald.co.nz/nz/migrant-exploitation-three-south-auckland…

by nz-it-worker | 16th Jul 21, 12:07pm 1626394071

Previously in her career (Restaurant Association chief executive Marisa) Bidois worked as a waitress in the early 2000s and was paid $25 an hour.

"I've had people sort of say to me, 'no you're lying about that, that can't be true' - but it is true and many of the people that I worked with were on that same rate."

kiwi-hospo-workers-say-career-offers-bad-wages-little-advancement

$25 an hour in the early 2000's in the Reserve Bank CPI calculator comes out to over $40. There would be few waiters/waitresses earning $25/hr let alone $40. The industry pats itself on the back if they are paying $22-$23/hr.

Marisa Bidois's efforts to paint hospitality as some sort of desirable industry has really highlighted how well they have done in suppressing the real wages of its workers.

by Lapun | 16th Jul 21, 3:54pm 1626407655

I've seen the same kind of data for bus drivers. It is really simple: we import pleasant people but they bring with them 3rd world standards of pay and conditions. Our political parties claim to represent NZ voters but they only represent special interest groups.
If you complain about immigration then you are accused of xenophobia or racism but like many on this site I am in favour of legal immigration; in favour of it at a planned rate but quite happy for that rate to be an above average rate for an OECD country. The main issue is not the pressure on infrastructure and public services but the stresses it puts on low income families. When waitresses earned $40ph they had a chance with a partner of buying a home and having a family without depending on benefits. Our move towards low wages may be internationally competitive when seen from above but is a kick in the teeth when you are at the bottom striving to have a normal family.

by Mr Pink | 16th Jul 21, 9:48pm 1626428926

Hang on a minute where does the government get off paying workers paid less than the minimum ,Thats FNK Bollocks there is a minimum wage for every person that works in this country

by pacifica | 16th Jul 21, 11:14pm 1626434070

Because clearing dishes, using an eftpos machine to sell beer and pushing a vacuum are such essential skills not able to be taught or found in NZ... except on close to the minimum wage (both slightly over and under it considering overtime).

by Takere | 20th Jul 21, 9:45am 1626731129

This tells you a few things about the government, Immigration NZ and Fa Foi. They have no clue about macroeconomics.