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The New Median Wage & Its Impact on Employers and Migrants

The New Median Wage & Its Impact on Employers and Migrants

The New Zealand government recently announced that their median wage will increase from NZD $27.76 to NZD $29.66 an hour, which will come into effect on 27 February 2023. This new wage is set to have a significant impact on employers and migrants alike, so it’s important to understand exactly how the new wage will affect you. Let’s break down what this could mean for employers and migrants in New Zealand.

Impact on Employers

For employers in New Zealand, the new median wage may result in higher wages for workers who are currently earning less than the proposed amount. Employers must also take into account any changes to the Accredited Employer Visa (AEWV) and sectors covered by sector agreements when determining wages for employees. It is important to note that if the wage threshold increases between the job check being approved and the migrant applying for their visa, then they may need to meet a higher wage threshold than was originally approved in the job check pay range. This means employers should be aware of any changes in order to remain compliant with immigration laws when hiring migrant workers.

Impact on Migrants

For migrants looking to move to New Zealand, this increase in median wage can be beneficial as it gives them more potential opportunities with employers who are offering jobs at or above this level of income. This could result in more competitive wages for those seeking work as well as greater job security due to these higher wages. However, it is important for migrants to keep an eye out for any changes that might occur between the time their job check is approved and when they apply for their visa as they may need to meet a higher wage threshold than was initially approved.

Median Wage will Depend on the Date of Lodgement of the Visa Application

When hiring a migrant worker, employers must ensure they are paid in accordance with the median wage that is applicable at the time of application. As an example, if an employer is granted a job check on 1 November 2022, any applicant for an Accredited Employer work visa submitted before 27 February 2023 must be paid a minimum of $27.76 – this being the median wage in immigration system at time of application. However, if the same visa application is made on or after 27 February 2023, employers are legally required to increase their offer to $29.66 – the new median wage in immigration system at that point. In either case, careful consideration and planning must be taken to guarantee migrant workers receive fair wages for their work and do not fall victim to exploitation.

The New Zealand government has introduced changes to their residence visa categories and pathways. This includes introducing median wage-related criteria for the Green List, Highly Paid, Skilled Migrant and Parent Categories. The median wage used for these categories will be based on the June rate published by Stats NZ the previous year, determined in February of each year. This standardized approach will provide added clarity to those applying for residence visas as well as increased notice of any updates. Stats NZ will launch a median wage calculator tool ahead of time to further support any person applying for a New Zealand residence visa. These changes simplify the application process allowing more people to qualify for visa eligibility.

Median Wage Exception for the Tourism & Hospitality Sectors

The COVID-19 pandemic has been particularly hard on the tourism and hospitality industries, leading to an exception to the median wage threshold under the AEWV that allows for a lower wage threshold of $25 an hour until April 2023. This exemption demonstrates recognition from the government that these sectors have suffered unprecedented levels of hardship and disruption in recent times, and will help support those employed in tourism and hospitality roles over the coming months. A smoother transition from this lower wage threshold is planned, with the government proposing a stage-by-stage increase over time to $28.18 in April 2023 until April 2024 when wages must meet or exceed 100% of the median wage. This continued support gives these industries hope for potential recovery in challenging times.

The introduction of a new median wage has implications both positive and negative depending on where you stand as an employer or migrant worker in New Zealand. For employers, it could mean increased costs due to having to pay higher salaries, while it could also mean improved compliance with immigration laws when hiring migrant workers. For migrants, however, this could result in better job opportunities and improved wages compared to before — but again, they must be aware of any changes that might occur before applying for their visas so they can make sure they meet all requirements necessary for approval. All-in-all, it’s important that both employers and migrants understand how these changes will affect them going forward so that everyone can benefit from these new regulations when they come into effect.

Author Details

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Vandana Rai

(LIA 201400900)

Vandana Rai is a Senior Licensed Immigration Adviser and has built a reputation around her rare set of skills, which could be considered ideal for her legal profession.

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