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Essential Skills details announced

Detailed information about changes to the Essential Skills policy is now available. The amended policy applies to all Essential Skills applications made from 28 August 2017.

Changes to the Essential Skills work visa policy were announced on 27 July 2017, following an extensive round of consultation. These support changes already announced to the residence Skilled Migrant Category (SMC). Changes to SMC and Essential Skills policies will both be implemented on 28 August 2017.

The Essential Skills changes are designed to maintain employer access to temporary migrant workers when there are genuine shortages, while reinforcing the temporary nature of work visas and reducing expectations of settlement from temporary migrants with no pathway to residence.

The changes to the Essential Skills work visa category include:

  • The introduction of remuneration bands to help assess the skill level of employment offered to Essential Skills visa applicants
  • The introduction of a maximum duration of 3 years for Essential Skills workers in lower-skilled employment. After 3 years, lower-skilled workers will need to spend 12 consecutive months outside New Zealand before they can be granted a further Essential Skills visa to undertake lower-skilled work
  • Requiring the partners and children of Essential Skills workers in lower-skilled employment to meet the requirements for a visa in their own right
  • The introduction of transitional instructions for existing visa holders. These will allow partners and children of Essential Skills workers in lower-skilled employment to remain in New Zealand if they already hold a visa based on their relationship
  • The introduction of immigration instructions which allow international students who transition to lower skilled employment to continue to support work and student visa applications for their family, if they were able to support those applications while studying
  • The introduction of visa conditions which require that visa holders continue to be paid above the relevant remuneration threshold and that they provide evidence of remuneration payment if requested by an immigration officer.

The new immigration instructions, effective from 28 August, are published in the Amendment Circular. Some frequently asked questions are below.

Previous announcement

Amendment Circular PDF 864KB


Frequently asked questions

What are the changes?

The changes apply to all applications made on and after 28 August 2017. There are 3 key changes from the existing Essential Skills policy:

  1. Remuneration will be used when determining the skill band of a visa applicant’s employment. The skill band is used to determine the visa length and whether a visa holder’s partner or dependent child can apply for visas on the basis of their relationship.
  2. People who have held Essential Skills work visas for 3 years for lower-skilled employment must spend 12 consecutive months outside NZ before they can get a further Essential Skills work visa for lower-skilled employment. The 3 year calculation does not include time spent in New Zealand while holding a visa granted before 28 August 2017.
  3. Family members cannot be granted visas based on their relationship to an Essential Skills work visa holder who is undertaking lower-skilled work (note there are special arrangements for those already in New Zealand and family members of students/ex-students).

When do the changes take effect?

The amended immigration instructions come into place on 28 August 2017. The changes do not affect existing Essential Skills visa holders until they apply for their next Essential Skills visa.

Remuneration bands

How many skill bands are there?

There are 3 skill bands: lower-skilled, mid-skilled, and higher-skilled.

The remuneration offered and ANZSCO level of an occupation is assessed to determine the applicable skill band.

Australian and new Zealand Standard Classification of Occupations (ANZSCO)

What are the skill band thresholds?

The following table outlines the remuneration and ANZSCO levels associated with each skill band. The mid-skilled remuneration rate of $19.97 per hour equates to $41,538 per year, based on a 40 hour work week.

Remuneration ANZSCO 1-3 ANZSCO 4-5
$35.24+ per hour High High
$19.97 - $35.24 per hour Mid  Low
Less than $19.97 per hour Low Low

What visa conditions apply to each skill band level?

The skill band determines the maximum visa length and whether your partner or dependent child(ren) will be able to apply for visas on the basis of their relationship to you.

Note: If your employment contract is for a period of time less than the maximum visa duration, your visa will be valid for the length of your employment contract.

Skill band Maximum visa length Maximum number of visas Eligible to support partner/child visa
Higher-skilled 5 years Unlimited Yes
Mid-skilled 3 years Unlimited Yes
Lower-skilled 1 year Up to 3 years No

When will the remuneration thresholds be updated?

The remuneration thresholds will be updated in November each year, based on New Zealand income data.

My job is classified as ANZSCO skill level 4, can I still be classified as mid-skilled?

No. ANZSCO skill level 4 or 5 roles can only be higher or lower-skilled.

How are the remuneration rates calculated?

To ensure the skill bands are applied consistently, remuneration will be calculated on the basis of payment per hour.

A number of common payment scenarios are described below.

Payment by: How the hourly rate is calculated:

Paid by hourly rate

eg. $25 per hour

$25 an hour

Paid by salary for a set number of hours per week

eg. $55,000 per annum, 40 hours per week

Salary divided by the number of hours worked

eg. $55,000 / 52 weeks / 40 hours per week = $26.44 per hour

Paid by salary for a range of hours

eg. $55.000 per annum, 40-45 hours per week

Salary divided by the maximum number of hours worked

eg. $55,000 / 52 weeks / 45 hours per week = $23.50

Paid wage for standard hours, with a different rate for hours worked above standard hours (e.g. overtime or weekend hours)

eg. $25 per hour for 40 hours work. $37.50 per hour for any additional hours

Both hourly rates will be checked. Both must be above the relevant remuneration threshold.

Paid by salary with a per hour rate for hours worked above standard hours (e.g. overtime or weekend hours)

eg. $55,000 per annum, 40 hours per week. $35.00 per hour for any additional hours

Salary divided by the number of hours worked, and the per hour rate. Both must be above the relevant threshold.

 

Do employers still need to pay the market rate?

Yes, the Essential Skills policy still requires remuneration to be at least the market rate.

My employment agreement includes deductions, how are these factored into the remuneration calculation?

Reasonable, agreed deductions (for example, for accommodation, goods and services) will be included when calculating whether a particular remuneration threshold has been met.

The calculation of remuneration will not include allowances, such as tool or uniform allowances, or bonuses which are dependent on performance.

Maximum stay

Who is subject to the requirement to spend time out of New Zealand after 3 years (subject to a stand-down period)?

The 3 year maximum stay only applies to those granted an Essential Skills visa on the basis of lower-skilled employment.

After holding Essential Skills visas granted on the basis of lower-skilled employment for 3 years, you are subject to a stand down period. When you are subject to a stand-down period, you must spend 12 consecutive months outside of New Zealand before you can be granted a further Essential Skills visa that allows lower-skilled employment.

Spending 12 consecutive months outside of New Zealand is the only way to satisfy the stand-down requirement. Holding a different type of visa for 12 months or spending 12 non-consecutive months outside New Zealand does not reset the 3 year maximum.

Can I apply for a further visa if I am subject to a 12 month stand-down?

Yes. The 12 month stand-down only prevents you from being approved another Essential Skills work visas for lower-skilled work. If you are subject to a stand-down period you can still apply for another type of visa, or an Essential Skills work visa based on mid- or higher-skilled employment. 

Does time spent in New Zealand on visas from before the policy changed count towards the maximum duration?

No. Only visas for lower-skilled employment applied for from 28 August 2017 count towards the 3 year maximum.

Family members

Do the changes impact the ability of visa holders undertaking mid- or higher-skilled work?

No. Family members of Essential Skills visa holders undertaking mid-or higher-skilled work are still eligible for visas based on their relationship to the Essential Skills visa holder.

Are there special arrangements in place for family members already in New Zealand?

Yes. Family members who already hold a visa on 28 August 2017 on the basis of their relationship to a lower-skilled Essential Skills work visa holder may continue to be eligible for a visa on the basis of their relationship, until the Essential Skills visa holder is subject to a stand-down period.

Can family members come and visit or apply for work visas in their own right?

Yes. Family members of Essential Skills visa holders engaged in lower-skilled work can apply for work, student or visitor visas in their own right. Applicants will need to meet the requirements for the visa, including the requirement that they demonstrate they are bona fide applicant.

Bona Fide

Are there special arrangements for family members of students, or ex-students?

Essential Skills visa holders who are undertaking lower-skilled work and previously held a student visa can support visas for their partner or dependent child(ren) if they meet the following criteria:

  • they held a student visa which allowed them to support a partner for a work visa or a dependent child for a student visa, and
  • they held a post-study work visa based on that student visa, and
  • they supported their partner or dependent child for a visa based on their relationship while holding a post-study work visa.

Other frequently asked questions

Are any changes being made to the labour market test?

No. Employers must continue to make genuine attempts to attract and recruit New Zealand citizen or resident workers. For roles that are not on a skill shortage list, that includes advertising and other recruitment efforts.

Roles that are ANZSCO skill level 4-5 must continue to be listed with Work and Income.

Advertising with Work and Income

I submitted an Essential Skills visa application before 28 August but it hasn’t been decided yet. Do the changes affect me?

No. All applications made before 28 August 2017 will be assessed against the immigration instructions that were in effect at that time. The length of your visa, your ability to support family, and any visa conditions imposed will also be in line with the immigration instruction in effect at the time the visa application was made.

My employer has an approval in principle. Does this affect my application?

If your employer’s approval in principle request was granted prior to 28 August, then the length of your visa will be granted in line with the conditions stated on the approval in principle.

If you are applying for a visa to undertake lower-skilled work, your partner and/or dependent children will be unable to apply for visas based on their relationship to you, regardless of when your employer’s approval in principle was granted.

Time spent working on a visa granted as a result of an approval in principle awarded prior to 28 August 2017 does not count towards the 3 year maximum stay for workers in lower-skilled roles.

How will employers be able to source the skills they need under the proposals?

Immigration policy is premised on a New Zealanders first approach and employers are required to ensure they are doing all they can to train and employ New Zealanders. Provided employers can demonstrate there are no New Zealanders available, they will still be able to recruit temporary migrant workers.

If the employment offered is lower-skilled, an individual visa holder will only be able to stay for a maximum of 3 years before having to upskill, apply for a different or higher skilled type of visa, or depart New Zealand. Employers are not prevented from supporting a new visa application to fill the vacancy.