Wage rate hike will hurt employers

Monday, 27 February the median wage used to calculate most work visa applications increases to NZD $29.66 per hour (or $61,692.80 per annum; based on a 40 hour workweek).

This increase applies to Accredited Employer Work Visa (AEWV) applications, sector agreement occupations and residence visa categories (where a job offer, or income threshold is required).

How does this impact your business?

Job checks already approved with pay rates lower than $29.66 require that the AEWV application is lodged before 27/02/2023. If not then a new “job check” must be applied for (and yes that means repeating advertising, letting the job ad run for at least 14 days and paying another job check government fee).

If your business has approved job checks at a pay rate lower than $29.66 per hour and you are midway through offshore recruitment, a new job check will be required if work visa applications are not lodged by 27 February.

Any job check approved with a pay rate higher than $29.66 per hour will not affected. Just remember job checks are only valid for 6 months (the visa application must be lodged within 6 months from the date the job check was issued).

There are a few exceptions:

·       Tourism & Hospitality. Most roles in this sector have a limited exemption to the median wage requirement. The current minimum of $25 hourly rate increases in April 2023 to $28.18. The exemption for this sector ends in April 2024.

·       Some sectors have agreements in place that require a negotiated percentage of the median wage to be paid at the time the AEWV is lodged. These sectors are: Construction & Infrastructure, Meat Processing, Seafood Processing (onshore) and the Seasonal Snow & Adventure Tourism.

·       The Care Workforce sector agreement is linked to the Ministry of Health support workers minimum wage and Seafood(offshore: foreign fishing crew) is the minimum wage plus a $ margin.

We expect some employers will be hit hard by this wage rate hike when they have been forced to recruit skills from overseas but haven't lodged work visas before this change takes effect. The government expects these employers to increase wages and start the job check process from scratch. The reality is not only will employers face increased costs but substantial delays getting much needed talent into NZ.

February is now the month when the median wage for visa applications will change. Provided a visa application is lodged before any change to the median wage rate then the old rate applies even if the application has not been processed.  

The team at Malcolm Pacific Immigration can provide advice, guidance and help to quickly move visa applications forward. Take professional advice now to avoid the stress, additional costs and delays.

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