Employer accreditation regime and the impact on franchisees

Tuesday, June 22, 2021

The new employer accreditation regime will come into effect in late September 2021. This new scheme will be compulsory for any employers wishing to support migrants to obtain or renew work visas, from 1 November. Whilst these changes are important to all business operators, franchisees need to take particular note of the scheme’s requirements.

Broadly speaking, to achieve accreditation, a business must demonstrate that it:

  • is in a sound financial position.
  • has human resource policies and processes which are of a high standard.
  • has a demonstrable commitment to training and employing New Zealand citizens or residence class visa holders, in the first instance; and
  • has good workplace practices, including a history of compliance with all relevant employment and immigration legislation.

There will be two ‘levels’ of accreditation:

  • standard accreditation — for employers who wish to employ up to 5 migrant workers on an Accredited Employer Work Visa (AEWV) at any one time.
  • high-volume accreditation — for employers who wish to employ 6 or more migrant workers on AEWV’s at any one time.

Criteria for standard accreditation

To gain standard accreditation a business must not be included a non-compliant employer stand-down list. This is a list of employers who have been found to have breached minimum employment standards by the Labour Inspectorate, the Employment Relations Authority, or the Employment Court.

A business must also comply with immigration standards and take steps to reduce the risk of worker exploitation.

Criteria for high-volume accreditation

In addition to meeting the standard accreditation requirements, high-volume employers must make a commitment to increasing wages and conditions for employees. This involves ensuring that employees are either earning at least 10 percent above the current minimum wage (currently $20.00 an hour) or, that those employees are covered by a collective employment agreement.

Later on, there will be a requirement to show a commitment to training and upskilling New Zealanders, which may be met by having a professional or career development programme in the workplace.

Criteria for franchisees

In addition to meeting standard accreditation requirements (and high-volume requirements if applicable), franchisees must:

  • have been operating for at least 12 months; and
  • have a history of hiring New Zealand workers.

A history of hiring New Zealand workers may be difficult to demonstrate, if a franchisee is heavily reliant on migrant labour.

Franchisees, like high-volume employers, must also show a commitment to improving worker pay and conditions. Franchisees could potentially satisfy this criterion by evidencing that they are:

  • a certified living wage employer, or
  • increasing wages for employees’ overtime in a structured and agreed manner, i.e., the business may have a collective employment agreement or a Fair Pay Agreement when the new legislation comes into effect, or
  • increasing wages of migrant workers each year in line with the percentage increase in the median wage, or a relevant collective or pay equity agreement.

We understand that franchisees will be subject to a higher-level of compliance checks, as INZ is looking to target ‘high risk’ employers. As part of this, accreditation for franchisees will need to be renewed every 12 months.

More detailed information about how the scheme will work for franchisees, following consultation with industry bodies, is expected later in the year. However, in the meantime, if you have any questions or need more information or specialist advice, please contact a member of our immigration team.

 

Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.

 

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