19 Nov 2018

Businesses to bear cost of migrant pay increase

1:14 pm on 19 November 2018

Increases in migrant worker pay could exacerbate labour shortages at a time when unemployment is historically low, according to an immigration lawyer.

Generic IT picture. 19 November 2018

From next week, businesses must pay lower skilled migrants $21.25, and higher skilled migrants at least $37.50. Photo: 123rf.com

Immigration New Zealand has hiked the minimum hourly wage for migrants by 60-cents to $1 to be in line with the median income.

From next week, businesses must pay lower-skilled migrants $21.25, and higher-skilled migrants at least $37.50.

The changes are only for the skilled migrant category and essential skills visa holders in industries such as trades, IT, hospitality and tourism.

Immigration manager Alejandra Mercado said the changes were designed to ensure it was approving migrants who brought the most economic benefit to New Zealand, and to improve the skill composition of people gaining residence under the skilled migrant category.

However, immigration lawyer Aaron Martin said the visa requirement changes would frustrate employers and create uncertainty for migrants that already worked here.

"[When Immigration] continually shifts goal posts over short periods of time you run the risk that you actually make New Zealand a bit unattractive, because how can people plan their lives?"

Mr Martin said if employers raised the hourly rate for migrant workers, it could put them at odds with local workers.

"A lot of people might say 'oh, they can just go to their employer and say 'give me a pay rise'. People need to understand that's outside the person's control and from an employers perspective ... introduces the issue of pay parity within their business.

"Maybe their colleagues are all going to say 'why can't we get that pay increase?' It's not actually the cost of raising that one person's wage."

Chief executive of BusinessNZ Kirk Hope agreed.

"That's going to push costs well above the minimum rate that New Zealand workers might be being paid," he said.

Mr Hope suggested lower rates for the regions, because smaller regional businesses would struggle to pay the hiked rates.

He said the hikes came at a time when unemployment was historically low, below 4 percent, and the economy relied on migrant labour to fill gaps.

Immigration New Zealand would update the minimum pay rates annually against official income statistics.