Immigration Support for the Tourism & Hospitality Industry

New Zealand's labour shortage isn't a new issue. However, it has worsened for employers and businesses in the tourism and hospitality industry due to the impact of Covid-19. 

The Government has made changes to rebalance the NZ immigration system. These changes aim to fill skill shortages after the pandemic led to NZ's closed borders.

The Government wants to help the New Zealand immigration system align with a national goal of increasing NZ business productivity and supporting economic growth. However, at the same time, NZ's hospitality and tourism industries are key to why so many overseas travellers choose New Zealand as a top destination, coming in as the 3rd most popular destination.* 

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What Is Happening In the New Zealand Labour Market?

As a part of the Government's rebalance announcement, the new Accredited Employer Work Visa (AEWV NZ) was introduced and requires employers to be accredited if they want to promote job vacancies overseas and hire migrants.

The AEWV scheme requires employers to pay a median wage of NZ$27.76 for migrant workers to qualify for an NZ working visa. The median wage will increase to NZ$29.66 in April 2023.

For an interim period, the Government has also implemented sector agreements to help employers fill skill gaps. These agreements allow some exemptions to the median wage requirements for hiring migrant workers under the AEWV NZ guidelines for specific occupations and sectors. This allows employers in the specific sectors an extension of time in order to make changes.

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How Has the Rebalance Affected NZ Tourism & Hospitality?

Under the AEWV scheme, all employers, including those in the tourism and hospitality industry, had to meet all of INZ's requirements. However, the hospitality and tourism industry criticised this policy and claimed that the new thresholds were unrealistic.

Under the new AEWV Scheme, employers must prove they:

• Have been operating their business for at least 12 months.
• Are registered with Inland Revenue and operating in NZ
• Have a good record with INZ.
• Have a complete employment agreement that meets employment standards.
• Can pay migrant workers the salary you have offered them.
• Have systems that help ensure migrant employees comply with their visa terms.
• That there is no available New Zealand resident/citizen.

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For the migrant workers to qualify for the AEWV, they also had to meet INZ's requirements:

• Work for an accredited employer.
• Be paid at least the median wage of NZ$27.76 per hour.
• Have a clean criminal history.
• Meet the health requirements.
• Have the required job qualifications and experience.

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The Response From the Tourism & Hospitality Industry

Businesses across the country stated that it wasn't within their budgets and couldn't afford to employ workers at almost NZ$28 an hour for an entry-level position. This is a valid issue for New Zealand, not just businesses, as our economy relies widely on what tourism and hospitality produce.

Tourism plays a crucial role in New Zealand's economy. Before Covid-19, tourism generated a direct contribution of NZ$16.4 billion to the GDP and a further indirect contribution of NZ$11.3 billion to New Zealand’s total GDP annually. It's the country's biggest export industry in terms of foreign exchange earnings and accounts for approximately 20% of total exports.**It also employs one in seven New Zealanders.

The hospitality industry supports tourism and is essential for New Zealand's economic growth. While many businesses were closed or greatly restricted over the Covid-19 lockdowns, hospitality typically generated NZ$6.8 billion to GDP annually and NZ$14.6 billion through supplier purchases and staff expenditures.***

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The Impact on the Tourism & Hospitality Industry 

For months, restaurants have been forced to turn away patrons due to staff shortages. Unfortunately, this has also been the case for other hospitality establishments and parts of the tourism industry.

Staffing shortages have resulted in restaurants and hotels closing rooms, cutting menus and limiting occupancy to cope. Sauna Auckland The limited amount of staff has also put pressure on the existing staff to extend their hours.

The national worker shortage within the tourism and hospitality industry has already seen a massive increase in wait times. Opening hours have been limited, along with declining service quality due to overworked staff.

Overall, there are just not enough New Zealanders to fill the tourism and hospitality worker gap.

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What Is the Future Of Tourism & Hospitality In NZ?

New Zealand's hospitality industry is entering its busiest time of the year, with summer approaching fast. It is estimated that this industry needs another 30,000 workers to join and for businesses to cope with the summer season.

"As the world recovers from COVID-19, labour shortages continue to be a persistent ongoing global symptom," Immigration Minister Michael Wood stated.

The build-up to summer and the staff shortage complications NZ has already faced have contributed to the Government's amendments to the AEWV and Working Holiday Visa rules. They are providing more support to the tourism and hospitality sector.

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What Are the Immigration Rules Being Amended?

The new changes act as support to help the industry take practical steps towards New Zealand businesses working more productively and operating with more resilience. However, this support might not last forever but is just a temporary extension to allow the industry more time to transition.

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Tourism & Hospitality Median Wage Exemption Extended

The Government initially responded to tourism and hospitality concerns in May 2022 and provided a threshold exemption of NZ$25 per hour until April 2023. However, they have announced that the median wage exception for tourism and hospitality will increase from NZ$25 to NZ$28.18 in April 2023. 

The exception will end in April 2024, when roles in tourism and hospitality must be paid at the median wage of NZ$29.66.

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Chef Qualification AEWV Requirement Removed

The Government removed the qualification requirement for chefs hired through an AEWV on 18 October 2022. This increases NZ's options and allows the country to recruit chefs without formal qualifications (equivalent to a New Zealand Certificate of Cookery Level) who are top-rated, high-skilled or experienced to come to NZ while labour market conditions are tight. 

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Seasonal Snow & Adventure Tourism Sector Agreement Announced

Following the threshold exemption, a new 'seasonal snow and adventure tourism' agreement has been announced to help employers find workers under the AEWV guidelines.

This sector's agreement aims to support the seasonal needs of migrant labour below the median wage, with a threshold of NZ$25 an hour, 90% of the median wage. This percentage gradually increases until the agreement ends in 2025.

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Working Visa Holiday Changes

In August 2022, the Government announced changes to increase access to working holiday makers, meaning more people can visit and work in New Zealand.

Capped schemes not yet filled had their cap doubled on 8 September 2022 and remain open.

The Government also announced that the closed schemes have specific re-opening dates, as listed below.

• Malaysia - 8 September 2022
• Uruguay - 13 September 2022
• Argentina - 15 September 2022
• Chile - 22 September 2022
• Taiwan - 29 September 2022
• China - 11 October 2022
• Hong Kong - 18 October 2022
• Brazil - 20 October 2022
• Vietnam - 25 October 2022
• Mexico - 27 October 2022
• Philippines - 1 November 2022
• Hungary - 3 November 2022
• Slovakia - 8 November 2022
• Austria - 10 November 2022
• Poland - 15 November 2022
• Lithuania - 17 November 2022
• Peru - 22 November 2022
• Turkey - 24 November 2022
• Portugal - 1 December 2022

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There are extra places for working visas added (and for schemes that are currently closed, extra places that will be added in the near future) for different working holiday schemes for various countries and territories, as listed below.

• 3000 - Korea
• 1200 - Czech
• 1150 - Malaysia
• 1000 - Argentina, China
• 940 - Chile
• 600 - Taiwan
• 400 - Hong Kong
• 300 - Brazil, Singapore
• 200 - Israel, Mexico, Uruguay
• 100 - Austria, Croatia, Estonia, Hungary, Latvia, Lithuania, Peru, Philippines, Poland, Slovakia, Slovenia, Thailand, Turkey, Vietnam
• 50 - Malta, Luxembourg, Portugal

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Need Help With Your Work Visa? 

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Sources

*According to Google's search results (as described by NZ Herald) 

**Tourism Industry Aotearoa

***Hospitality New Zealand