Navigating the Challenges: What Went Wrong with Controlling Third Party Employer Accreditation.

Many migrants coming to New Zealand for work start through a recruitment or labour hire company. These companies were critical in filling skill shortages in the construction industry throughout the Christchurch Earthquake response and construction boom in other parts of New Zealand.

In my previous life, I worked for and ran labour-hire companies. Most are well-run, compliant, and have better resources to care for migrant staff than other employers (this is why some companies choose labour hire over employment migrants themselves). The industry is highly competitive and challenging in an economic boom or recession. Unfortunately, a few bad labour hire companies have failed or exploited workers in the past 12 months as the New Zealand economy struggles with recession.

1. Inadequate Oversight and Enforcement

One of the most significant problems has been the lack of stringent oversight and enforcement. While the accreditation process is designed to vet employers rigorously, in practice, many businesses have slipped through the cracks. As labour-hire companies have been put into liquidation, many migrants are in breach of their visa conditions, left without an income in a foreign country with no financial support available.

Employers applying for accreditation only had to make declarations they were financially viable, had appropriate policies and procedures, and were compliant with employment and immigration law. Third party accredited employers only had to have been employing staff in New Zealand for at least 12 months which is clearly insufficient time to determine how viable and compliant a company is. There is no distinction made between well-established players and relatively new startups. This means that financially unstable or inexperienced businesses can obtain accreditation just as easily as those with a proven track record. The absence of thorough financial scrutiny increases the risk of migrant workers being employed by companies that may not be able to sustain their operations or meet their obligations.

2. Excessive Job Tokens Granted at Job Checks

Another major factor contributing to the system's shortcomings is the large number of job tokens granted during the Job Check stage. These tokens, which allow employers to hire migrant workers, are often issued in excessive quantities. This led to labour hire companies requesting huge job tokens as the demand for labour in the immediate post Covid-19 border openings skyrocketed. Labour hire companies like any other accredited employer are required to guarantee Accredited Employer Work Visa holders at least 30 hours per week. When the recession in 2023 hit hard, many labour hire companies were exposed as their clients axed labour hire staff to keep their own staff working.

Immigration New Zealand does have a rule around percentages of migrant vs. New Zealander labour being on a minimum 30-hour-per-week employment agreement. However, this process has failed. Checks haven’t been made throughout, and the reality is that most labour hire companies do not employ New Zealanders on guaranteed 30-hour-per-week agreements; most employment agreements are temporary, casual, with the occasional fixed-term agreement for longer-term projects.

3. Complex Processes with Inconsistent Standards

The accreditation process has often been criticised for being overly complex and opaque. The lack of clear guidelines and the often changing accreditation criteria add to the confusion. This complexity deters legitimate businesses from seeking accreditation and opens up opportunities for unscrupulous operators to exploit loopholes.

I have seen the inconsistent application of Immigration Instructions when assessing accreditation, job checks or visa applications. Immigration officers may interpret and apply the criteria differently, leading to discrepancies in which employers are approved with little to no evidence or the opposite, where irrelevant information is requested.  This inconsistency erodes trust in the system and creates an uneven playing field for businesses, where some may be unfairly advantaged or disadvantaged.

4. Reactive Rather Than Proactive Approach

The current system tends to be reactive rather than proactive. Instead of actively identifying and addressing potential issues before they escalate, the authorities often respond to problems only after they have been reported. This reactive approach means that many issues go unnoticed or unaddressed for extended periods, further compromising the efficacy of the accreditation system.

5. Technological Gaps

Immigration New Zealand implemented its “Online Enhanced” system, ADEPT, with the introduction of the accredited employer system.  It has been plagued with issues since its introduction, with files missing from applications, applications disappearing altogether and constant technical errors and outages.  Over two years with ADEPT in action, it has still been plagued with issues, including the renewal process for accredited employers.

Looking Ahead: Solutions and Reforms

Addressing these issues requires a multifaceted approach. Here are some potential solutions:

• Financial Viability Checks: Introducing rigorous financial viability checks during the accreditation application stage to distinguish between well-established players and new startups.

• Regulating Job Tokens: Implementing stricter controls on the number of job tokens granted to prevent oversupply and maintain a balanced labour market.

• Enhanced Oversight and Resources: Increasing funding and resources for monitoring and enforcement can help ensure that accredited employers comply with the standards.

• Simplified and Transparent Processes: Streamlining the accreditation process and providing clear, consistent guidelines can make it more accessible and fair.

• Proper IT Systems: Developing a centralised digital platform to manage the accreditation process can enhance efficiency and transparency.

Conclusion

Labour hire employers are vital to meeting the demand for labour in New Zealand’s economy.  The employer accreditation system plays a crucial role in maintaining the integrity of the labour market and protecting migrant workers. However, the challenges outlined above have significantly undermined its effectiveness. By addressing these issues through comprehensive reforms and enhanced oversight, Immigration New Zealand can create a more robust and fair accreditation system that benefits both employers and migrant workers alike.