Are you being served? By a Kiwi?

Ankur Sabharwal is the owner of immigration advisory Visa Matters. He is a licensed immigration adviser dealing with complex immigration matters.

OPINION: When you eat at an Indian restaurant in future, you’re more likely to be served by a Kiwi than by an Indian national who’s here on a work visa.

Let me explain.

From 4 July this year, employers will have to pay workers applying for an Accredited Employer Work Visa (AEWV) a minimum of $27.76 per hour (the new median wage), even for low-skilled jobs such as kitchenhand and waiter.

However, restaurant owners told me they could only afford to pay $27.76 for chefs and managers. That is, they cannot pay the median wage for low-skilled staff.

The Government’s objective for this category is “incentivising employers to employ more New Zealanders to respond to skill and labour shortages”. Employers I spoke to will certainly be giving New Zealanders a try in lower-skilled roles.

Where will restaurant owners find these workers?

My contacts in Indian restaurants say they are happy to hire New Zealanders if they can find them.

“Kiwis are well-travelled and eat a lot of Indian food, so they can answer customers’ questions about the food we are serving,” said Bunty Minhas, owner of Punjabi Kitchen restaurants in west Auckland and the North Shore.

Minhas told me that he could train New Zealanders quickly as kitchen or waiting staff, but recently he has had trouble finding them. Work and Income New Zealand told him on 11 April that it had no one it could refer to work for him as a dishwasher.

Where possible, Minhas said he would offer jobs to Kiwis, but he couldn’t afford to pay $27.76 to wait and kitchen staff. Instead, he would include free food as part of the deal – a common way for restaurants to attract and retain workers.

But at a time of labour shortages, who else can fill these positions at a price employers can afford? There are several possibilities.

• New Zealand residents. As well as existing resident visa holders, about 200,000 people are expected to be approved under the 2021 Resident Visa category, which closes on 31 July 2022. Once approved, they can work for any employer.
• Working Holiday Visa holders. This category is being progressively reopened from 13 March 2022. It allows full-time work on a non-permanent basis.
• People holding “open” partnership-based visas. These are mainly partners of New Zealanders and Work Visa holders.
• Student Visa holders – who can work up to 20 hours a week – and Post-Study Work Visa holders. The New Zealand border has just reopened to 5000 students from overseas, but it will take some time before they can enter the workforce. In addition, a surprising number of former students (graduates) are working in low-skilled jobs such as caregivers, despite their new qualifications. Many of these have already applied for 2021 Resident Visas and are likely to be approved.

Higher wages are just the start.

As well as increased pay levels, Minhas and other restaurant owners I’ve spoken to are concerned about a raft of new costs and bureaucratic requirements that come with the Accredited Employer Work Visa.

These include:

• An Immigration New Zealand (INZ) Employer Accreditation application fee of $740 for an initial 12-month accreditation.
• An INZ’s “Job check” application fee of $610 – to prove that no New Zealanders are available for the position being offered to a worker from overseas.
• An INZ’s AEWV worker application fee of $540.

That’s three applications for a total of $1890 compared with one application at $495 under the Essential Skills work visa, which will be phased out on 3 July 2022.

The first two – employer accreditation and “job check” application – are new costs which the employer must bear.

The employer is also required to advertise the job, so they will have to pay for that too.

Some new requirements include employers having to complete learning modules and providing migrant workers with work-related settlement information within a month of starting work.

Migrant workers must also complete modules on employment rights within a month of starting employment. These must be done during paid hours, and employers must keep records of modules completed.

Employers have always needed to meet all New Zealand employment and immigration laws, but the AEWV goes further. Employers must now comply with “employment, immigration and business standards” – which the Government will set through its AEWV policies.

There’s no free lunch. Or no lunch at all.

I have previously supported the introduction of the Accredited Employer Work Visa. It means that employers could lose accreditation or not be accredited in the first place, if they don’t treat migrant workers fairly.

But the extra fees, compliance costs, and bureaucratic hoops are harder to justify for small businesses already under the gun. Restaurant owners I have spoken to are deeply concerned about the Government adding extra expenses at a time when their other costs are also rising.

Restaurant owners such as Bunty Minhas of Punjabi Kitchen warn that if operating costs increase further, this will flow through to higher meal prices. Or, he said, some restaurants could close at lunchtime to reduce staffing costs, threatening their overall viability.

As a result, more restaurants may close for good.

DISCLAIMER: This article does not constitute immigration advice. Individuals need to seek personal advice from a New Zealand licensed immigration adviser or lawyer to assess their unique situation. Ankur can be contacted at info@visamatters.co.nz.