The media has recently carried a volley of stories about overseas workers being sold the promise of work in New Zealand, and the Work Visa to allow them to come and live here. After they arrive, they either find that the job does not exist, or they are dismissed after only a short time with some flimsy excuse.

What is going on, and why? Why did the Government not see that this was coming?

The Scenarios

From what we have seen at Laurent Law, and the reports filling the news, there are patterns here. A common one is that hopeful migrants are attracted by a recruitment agent, often in their own country, who claim that they have loads of jobs lined up over here. They pay the agent a large sum of money, perhaps NZ$30 – 40,000. By one means or another the worker gets a Job Token to apply for an Accredited Employer Work Visa (AEWV). With this they get a Work Visa and come in.

Then they discover there is no work for them, either because there never was a job, or the employer doesn’t want to take or keep them. Accusations have been flying about who is to blame here. It is suggested that employers are taking a cut from the offshore agent to offer a job and to sell their Job Tokens. This would be a back-door way of charging a “premium” on employment, which the migrant paid the agent in the first place, and which is illegal. The employer can then fire the worker using (say) the 90-day termination clause in the employment agreement and repeat the process with the next person.

In other cases, the migrant only gets to keep the job if they agree to pay back the employer a portion of the wage they earn under the table. This is also a premium on employment, but it is hard to trace if it is done in cash or by an anonymous funds transfer.

Those who wind up with no job are often in an impossible situation. Many have borrowed money to pay the in-country agent for the privilege of being dumped in New Zealand. They have no way of paying it back. They have put up their homes, their relatives’ assets, even their own children (in one case I have heard of) as security. They fear the ruthlessness of the debt collectors if they go back.

Why Has it Got so Bad?

There are three obvious reasons for this apparent epidemic of exploitation. The first and obvious target is Immigration New Zealand’s resourcing. The AEWV scheme has three stages:

  1. Employers apply for Accreditation.
  2. Once accredited, employers apply for a Job Check on the positions they wish to fill, to establish that they need to hire from overseas. They get a Job Token for every position that INZ allows them to fill with migrants.
  3. The migrant uses the Job Token to apply for the visa.

INZ opened the Accreditation scheme without the capacity to do adequate checks on any of these three stages. Accreditation is an online check-box exercise with (usually) no questions asked. Employers put in what the industry has come to call “zero/zero” Job Checks – no qualifications or experience is required to do the job – and the Job Check is approved.

Visa applicants’ documentation has not been verified. It may be unpopular to say so, but it is likely that some of the stranded migrants making the news supplied false papers, such as work experience certificates, to get their visas. This has happened before on a large scale. Or else they have been wilfully blind to what their agents have done for them, simply paying vast sums for someone to “do what it takes” to get them here. Fearing the loan sharks back home, they can do nothing else but plead that they are victims.

Verification and audits of Accredited Employers are starting, but already more than a year has passed since companies were able to apply in May 2022. A review of the AEWV scheme has now been announced, but the damage is already done. Ultimately, the increased 3-stage bureaucratisation of the process is unsupportable.

Secondly, the cohort of employers who can hire migrants has been ring-fenced to include just those who have Accreditation. This inevitably concentrates power into the hands of that subset of employers. There will always be some who misuse it, but now the ability of that few is magnified.

At the same time, most AEWV holders must be paid at or above the median wage, which currently stands at $29.66 per hour. On average, migrants are meant to be paid more than NZ Residents or Citizens. In some cases this probably means that overseas workers are paid more than their Kiwi co-workers for the same job. At a time of sagging business confidence, higher cost of credit and recession, some employers will be tempted to find ways of recouping that cost.

Finally, the elephant in the room that no-one – including INZ – is prepared to engage with, is what to do about the offshore agents. To be clear, these are not licensed immigration advisers. They are uncontrolled and accountable to no-one. No doubt, they tale the lion’s share of the fees they charge for promising to get jobs and visas for their compatriots.

The Job Token system has monetised visa eligibility. An agent who can find employers with Job Tokens in hand has a sought-after commodity to sell. This is, in my view, an unintended but inevitable consequence of the system that has replaced the previous merit-based Work Visa policies.

Could This Have Been Avoided?

Again, there are two answers to this question. The first is that the Government was in too much of a hurry to get the Accredited Employer scheme up and going when the borders reopened in mid-2022. It has been wanting to do it since at least 2018 when industry consultation was sought.

Throughout, the recurring narrative was that the system had to change because of a fear that workers were being exploited, and this is why the other policies had to be retired, especially the Essential Skills Work Visa. No doubt exploitation was occurring in some places, but at nothing like the scale which we are now hearing about every day.

My personal view is that the drive to accreditation was ideological, fuelled by a perception that the employer class could not be trusted and Government had to control them by tagging every employer who wished to hire from overseas. By contrast, the Australian Government received advice in 2017 that most employers do not exploit workers, and that imposing additional regulation would create a burden on small businesses in particular, when they are not the cause of the problem. Instead, it was said, Government should increase resources for the enforcement of existing laws.

The previous clutter of Work Visas policies could have been tidied up, but left in place. Resources should instead have gone into the Labour Inspectorate and MBIE’s fraud investigators.

Secondly, the underlying concept of tying migrant workers to a single employer has been criticised in multiple quarters. A commentator has referred to it as “modern slavery”. The Productivity Commission in its 2022 report on immigration found that it contributed to driving down wages and productivity, and recommended that the Government cease the practice of tying migrants to a single employer. That is not a message the Government wants to hear, because it means rolling back the semblance of control which it claims to have over private enterprise seeking to fill staff shortages.

It is sadly ironic that an administration which claims to stand for the rights of working people has contributed to a perfect storm of conditions that erode those rights.