Oct 6, 2023

Immigration policy update – Median wage increase

There is a limited time window before the increase takes effect. It is crucial that you act swiftly to avoid undue financial stress for your current migrant workforce and businesses, and to facilitate a seamless transition when the new wage comes into effect.

We’ve compiled a comprehensive list of key points and recommendations to help you navigate this change, organise your approach and get a clear understanding of how this wage increase could impact your organisation positively with the right plan in place.

Below are some key points to help you get organised and plan. 

Your median wage increase action plan –

Impact on Recruitment:

If you plan to hire new staff, now is the time! If you hire after the median wage increase in February, you will need to offer a minimum wage of $31.61 per hour (unless exempt). This could disrupt your existing wage structures and staff dynamics, potentially necessitating a comprehensive wage review.

Pre-emptive Action:

To stay ahead of the changes, you need to get underway with the following now, especially with INZ increasingly doing in depth checks;

  • Job Check : Review your current job listings and ensure they are aligned with the current median wage.
  • Recruitment Process: Adjust your recruitment strategies to account for the impending wage threshold changes.
  • AEWV lodging: If applicable, ensure that any Accredited Employer Work Visa (AEWV) applications are lodged before the new wage threshold takes effect. Don’t forget to ensure your employment agreements exclude a trial period.

Existing Staff:

For current employees, particularly those on median wage exemptions, make sure you consider the following:

  • Communicate the impending changes transparently – fostering a sense of trust and cooperation during transitions is important. We are happy to work with you to visit your team and update them if you require.
  • Wage Review – evaluate the wages of employees, especially those approaching the end of their exemption period within the next 12 months.
  • Adjust their pay to match the current median wage – this will allow them to secure up to 5 years of employment in New Zealand, including their previous time spent on an AEWV.

Residence Pathways:

Certain roles require meeting specific wage thresholds for residence qualifications (e.g., Machine Operator – 1.15 x median wage; Crane Operator – 1.3 x median wage). It’s crucial to act now in order to secure this pathway for your employees. Here are the two key factors to address;

  • Wage threshold review – review and adjust the pay for employees in roles that require a wage threshold for residence qualifications. Initiating the 24-month qualifying period now can be advantageous before the threshold increases in February.
  • Future-Proofing – once employees meet the wage threshold, they won’t need to chase new thresholds even if they increase in the future. Ensuring they meet the threshold now provides a stable pathway to residence

Author

Nassim Lalehzari
Chief Commercial Officer – Visas
IAA License #201200100

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