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Immigration Blog
Migrating is more than just filling in forms and submitting paperwork; its a complex process that will test even the most resilient of people. Understanding Australia & New Zealand at a grass-roots level is paramount to your immigration survival, and to give you a realistic view of both countries, its people and how we see the world, as well as updates about any current or imminent policy changes, subscribe to our regular blog posts by entering your details below.
Variables in 'Effective Hourly Rate'
A few weeks ago I wrote a piece explaining that INZ now uses an ‘effective hourly rate’ to determine remuneration when deciding if a job is skilled or not under the Skilled Migrant Category. To be skilled, the effective hourly rate must be $24.29 to get ‘points’ for a skilled job. However, under the Work to Residence/Accredited Employer pathway, there is also a need to establish an effective hourly rate.
Strangely (or not depending on your day job), INZ approaches what is in effect the same question with two different processes.
As the new skilled migrant policy is now a few months old, we are starting to get a better idea of how INZ is interpreting this ‘effective hourly rate’ instruction which, on the face of it, seems pretty straightforward. As usual in the world of visas and bureaucrats, it is anything but.
This is owing to the fundamental reality that out here in the real world, employment contracts are not standardised and most people are not paid on the basis of an effective hourly rate but by salary or wages.
Both now must be broken down into this ‘effective hourly rate’ to determine points for skilled employment.
Employment agreements/contracts in NZ must confirm the hours an employee might, is expected to or will work (so there are three variables to begin with). To cover the possibility/probability (two more variables) that from time to time or regularly or never, (three more variables) these hours might vary; most employment agreements will say something along the lines of ‘hours of work will be 40 per week and any other such hours as might be required from time to time’. This outlines what is expected but covers the possibility that more might be necessary.
I can’t remember from my schoolboy maths what the possible total number of outcomes these variable might lead to, but it is a big number of possible permutations INZ has to deal with in deciding how many hours someone has, or wil work.
How does INZ deal with that in terms of breaking it all down to an effective hourly rate?
Not very well, is the short answer. As it turns out, it depends which office is processing it (and likely which officer) and which category of visa it is - skilled migrant or residence form work (for an accredited employer).
As it turns out, the applicants pay cycle is being used - even though you’ll find no reference to this is the ‘rule’ book.
INZ can, if it looks like there is any chance of the hours being variable and the possibility exists that the hours are not fixed, (and an officer can request evidence of actual hours worked) will attempt to calculate the hours per week. If, say, the applicant is paid monthly and in one week of that month they work an additional 5 hours, then the total hours worked in the entire month will be added up and divided across that month to give an average weekly number of hours. That will naturally then reduce the overall effective hourly rate but not by very much.
However, if the applicant is paid weekly and five additional hours are worked over the month, then the effective hourly rate reduces far more because the pay-cycle used to calculate the hourly rate is shorter i.e. one week. So this person is assessed as working 45 hours per week. The one on the monthly pay cycle is assessed as being paid 41.25 hours per week (assuming INZ works on a four week month)
How bizarre is that?
You could then have two employees doing an identical job in the same company - both are earning say $25 per hour. One is on a monthly pay cycle and works an extra five hours every month. The second also works an additional five hours a month but is paid weekly. The second one now has a job that will no longer be deemed to be skilled because once calculated, their average earnings falls below the minimum threshold to be skilled, but the first is fine. Both work the same job for the same company doing the same hours for the same gross hourly wage but the outcome is that one is granted a Resident Visa and the other isn’t...
The clear lesson here is if you are in a job where you might, from time to time, work a bit of overtime and you don’t earn significantly more than $24.29 per hour, ask your employer to put you on a monthly pay cycle.
If you are on a Talent (Work) Visa and working for an accredited employer things are a little different but INZ is, as usual, not being definitive nor helpful about how they might calculate those hourly rates.
When assessing the Resident Visa claim following 24 months in work for an accredited employer, INZ has suggested they calculats hourly rates by taking the annual amount paid, dividing that by 52 weeks and then by the hours worked as per the contract. The minimum hourly rate required to achieve the minimum salary threshold is NZD$26.45 per hour based on a 40 hour week over 52 weeks. Thus, someone being paid $55,000 (being the current minimum annual gross salary) but working 41 hours or more per week would not qualify for their Resident Visa.
There is, however, no similar clause in the 'rule book' to that in the Skilled Migrant Category in terms of how to deal with any additional hours that might be required to be worked contained in the employment agreement when calculating additional hours.
INZ has vaguely suggested that they may request evidence of actual hours worked at Residence stage for a Work to Residence applicant, and then add the total actual hours worked across the entire period (2 years) and divide that by 104 (being 52 weeks x 2) to determine the actual hourly rate.
So two different divisions of INZ are tasked with calculating remuneration and both apply different assessment measures to establish effectively the same thing.
I don’t know how I still have any hair.
Until next week...
Iain MacLeod, Southern Man
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Teacher Shortages Starting to Bite
One of the unexpected consequences of Auckland's house price values and population increase in the past few years is an emerging shortage of teachers.
It is, by all accounts, really starting to bite.
Population growth has meant the government has set aside more money for construction of additional schools, classrooms and teachers particularly in, but not limited to Auckland.
The problem schools face is that many of our own local graduates are accepting jobs outside of Auckland, where on a teacher's salary they can afford to get into the housing market, something which is only going to be a dream for many young and single teachers if they stay in our neck of the woods.
Operating a national pay scale, it matters not where a Teacher is employed in the public sector (which accounts for over 95% of all schools) but how qualified they are. So an Auckland based teacher who begins on an annual salary of around %55 000 earns the same as the teacher at the other end of the country where the cost of living is significantly lower. Average house prices in Auckland are around $900 000. The average house price across the rest of New Zealand is around $500 000. You get the picture.
Until a few years ago we were advising most teachers that get to work as a teacher without a Residence Visa or that precious work visa was possible but usually took many months to secure roles. We had a few coming through but we advised most to be very cautious and realistic about the barriers and the time frames they could expect and the uncertainties of achieving the residence dream if they were teaching.
Most schools (still) prefer locally trained teachers so ironically there has been a relative shortage of experienced teachers for a number of years; but it was the schools rather than the usual 'chicken and egg' situation surrounding jobs and work visas as the cause.
As a company, IMMagine has until recently advised our pre-primary, high/secondary and tertiary level teachers to use Australia as the 'back door' to New Zealand. We have been able to secure NZ Resident Visas off the back of Australian Permanent Residence Visas for a number of teachers. This means when they get off the plane they have full work rights and the schools will talk to them and if not offer them full time and permanent roles then perhaps as 'relief teachers'. If they cannot find anything then they could go and do whatever else they needed to in terms of work to put food on the table.
We have this year however had two high school teachers (one from Singapore and one from South Africa) secure full time and permanent teaching roles without visiting New Zealand (both got jobs in Auckland).
We are now representing a teacher from the Democratic Republic of the Congo who has been denied a visa to take up a job offered at an Auckland High School. The position he was offered was eventually filled locally after many months but the school has another vacancy going unfilled all year they have offered him.
Many schools are now reporting fewer than 5 applicants per vacancy advertised.
How times have changed. Only four years or so ago the Ministry of Education was putting off those from overseas making enquiries about coming over as they said there were fewer teachers leaving the profession (caused by, it was believed, the global financial crisis where higher perceptions of job insecurity meant many were staying in their jobs rather than moving on).
This doesn't mean desperate school principals are standing at the Auckland Airport arrivals hall with some "Teachers Wanted!" signs, but this increasing shortage is real and presents opportunities for some teachers where few existed even 2-3 years ago.
We will likely not stop advising our clients to use the Australian 'back door' pathway as landing here with a Resident Visa trumps even a job offer and the whole NZ visa process to negotiate if a teacher finds a job. It is all about minimising risk and there is no substitute for the certainty of the Resident Visa in the hand!
Until next week...
Iain MacLeod
Southern Man
Chicken & Egg
I have written many times about the “chicken and egg” situation that exists for migrants trying to enter the labour market before they have a Resident Visa. That is that the employers generally demand Work Visas before they will offer jobs but the Immigration Department cannot (on the whole) give a Work Visa without that job.
It is the reason why many migrants fail in their quest to get New Zealand Residence (I hasten to add not our clients as we seem to do a pretty good job at identifying those who have all the appropriate attributes to secure employment).
I had an interesting experience this week which is worth sharing and might help employers who are willing to engage in the immigration process but who don’t want floods of applications from people not in New Zealand.
A client had applied for a job whilst in New Zealand through www.seek.co.nz.
He received a computer generated rejection on the basis that he did not have a Work Visa (it was one of the questions asked).
He then followed up with a phone call to the company and asked if they would be interested in talking to him or reviewing his CV. They suggested they would and he seemed like a very interesting and qualified candidate.
He then rang me to see if I could call the employer and explain how the immigration process worked given they were somewhat reluctant, he felt, to engage with the visa process.
I called the employer and quickly learned that contrary to the perception they might not be willing to engage the immigration process (a perception they created by their online advertising), they already employed ten migrants on various forms of temporary Work Visas.
I then called the client back, who has now had a conversation with the employer to be, which I hope leads not only to an interview, but a job offer and I will secure him the Work Visa within two or three weeks.
What would have been a more sensible approach from the company when advertising online, was to have three questions that they ask and which may trigger an automated response. These would be:
- Are you a New Zealand Resident Visa holder or citizen of New Zealand or Australia? Yes/No
- Do you hold a Work Visa that allows you to take up this job? Yes/No
- Are you in New Zealand but do not have a Work Visa? Yes/No
In this instance, had the employer done that they would have avoided getting thousands of applications from applicants who are not in New Zealand, not available for quick and easy interview and who might not be seriously committed to the process of migration, but they would have identified my client who is here, serious and available.
It continues to amaze me in this connected world how employers and recruiters still only deal in their minds with two types of potential “foreign” candidates – those who have Permanent Residency and those that do not.
There is clearly a simple way for them to further refine their criteria which both protects them from a deluge of overseas applicants but which provides them with access to potential employees who can get Work Visas who are in New Zealand.
Food for thought for all you employers out there facing increasing skills shortages.
Until next week
IMMagine New Zealand - Southern Man
Unemployment Falling Fast
Reflecting an economy in expansion mode latest unemployment statistics must make very pleasant reading for a Government one month out from national elections.
The unemployment rate has fallen to its lowest level in 5 years and at 5.6% New Zealand now has the 9th lowest unemployment rate in the developed world. By comparison our Australian neighbours were surprised this week by a jump in their unemployment rate to 6.4%.
When unemployment hits 5% in New Zealand skills shortages generally become acute and extend beyond the highly skilled to the semi and unskilled.
Over 85,000 new fulltime jobs have been created across all sectors of the economy over the past year.
Hiring intentions continue to run at historically high levels. Skilled vacancies are 17% higher than a year ago and employers continue to report difficulties in filling those vacancies.
With net migration running at close to 40,000 people over the past year many of these vacancies are being filled by highly skilled and fluent English speaking migrants. Including you might be surprised to learn the 25,000 Australian citizens who migrate to New Zealand every year under our open border policy for citizens of one another’s countries.
As a consequence of this flow of Australians joining us, New Zealanders returning home from a contracting labour market in Australia and few New Zealanders heading across the Tasman, many migrants from other countries may continue to struggle to find the skilled jobs they need to secure their residence.
When asked how they intend to meet the growing skills shortages employers indicated:
- 39% increased salaries to attract local applicants
- 35% trained less qualified candidates
- 26% brought in contractors; and
- 23% recruited overseas
It is insightful how few consider migrants as part of the solution but explains why low unemployment does not always lead to securing employment more quickly.
In greatest demand were tradespeople, forestry, manufacturing, construction, IT and Telecommunications.
What always interests me is how few employers seek to recruit migrants as part of their mix but chase an every decreasing pool of local applicants.
I appreciate that employers prefer migrants to be in New Zealand, preferably with work visas (which you cannot get without the job), fluency in English, culturally compatible, a personality they identify with and obviously some demand for their skills set.
Only 51% of employers survey4ed believed that the staff they have possess all of the skills they need to adequately carry out their jobs.
Looking on the bright side, although the bias toward local applicants continues we are heartened by the number of employers and recruiters (even!!) who are now more willing than they have been in recent years to entertain migrant applicants.
One might imagine that the Government might begin to increase the numbers of migrants they let in without job offers but it is my view that they will not. Recent experience suggests that as the Government has demanded more skilled migrants find jobs first, they have. This will reinforce the governments view that with a tightening local labour market migrants should (in theory) be able to secure jobs more easily. And the politicians can defend their jobs first for New Zealanders mantra (as they should).
Our message remains one of caution optimism for our clients urging you to carefully research the frequency of jobs that you might be able to fill, accept that you’ll need to be in New Zealand for 2-4 months to secure employment, to persevere, remain positive and accept that you need to apply for many jobs to secure a small number of interviews, an even smaller number of short lists but ultimately it is very rare for our clients not to secure the employment they require to secure their residence visas.
Until next week
Iain MacLeod - Southern Man
