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Minimum wage hike and migrant pay threshold raise

Published 20 Jan 2020

The Labour led Government have confirmed the adult minimum wage will rise to $18.90 from April 1 2020. This is a rise of $1.20 per hour and affects both the training and starting out rates also, being 80% of the adult minimum. This means employers should expect a further raise by $1.10 as a minimum the same time next year in 2021 to achieve the Government's promise to a $20 per hour minimum wage by 2021, that's with the proviso the current coalition survive this year's general election.

Hiring migrant workers will also be more expensive this coming year. Ian Lees Galloway, Minister for Immigration has announced higher remuneration thresholds for both Skilled Migrant Resident Visas and Essential Skills Work Visas  in 2020. The new rates apply only to new applications (on or after Feb 24 2020), not visas already granted of course, but this makes it harder for employers to acquire the skills from abroad, and harder for migrants to stay here long term.

24 February 2020 is the delayed date from last November to give all parties more time for the changes. The 2% rise while not sounding too onerous may be enough to utterly disrupt some small employers and larger industries alike including the aged care and nursing industry.  Migrant workers on visas account for approximately 33% of our 22,000 caregivers and 5000 nurses in the aged-care sector here in NZ. In recent times these workers have had to fight hard to get their wages up from minimum rates and now qualifying for residency eligibility, this may now have to be re-visited in order to stay in the country. A potential huge problem for a country with an ageing population.

An example provided by Immigration NZ themselves states:
A chef currently paid $21.50 per hour is considered mid-skilled, as the occupation is ANZSCO level 2 and the pay is above the existing threshold of $21.25. If they applied for a further visa after 24 February 2020 they would be considered low skilled, unless their hourly pay rate increased to above the new threshold of $21.68.

So if you're considering hiring migrant workers it's worth double checking you won't be committing to a larger investment than you otherwise may have predicted come February 24.