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In a welcome move for business owners, Immigration New Zealand (INZ) has revised its policies to make it easier for those buying businesses to keep their existing workforce. From 6 November 2024, this change will streamline the process for Accredited Employer Work Visa (AEWV) holders, reducing delays and red tape that previously made it difficult for new business owners to retain valued migrant staff.
In January of this year, we raised to INZ a problem we saw people facing.
The purchase of a business is typically a purchase by a new company of the original company's assets as a going concern. This is how most business purchases of SMEs take place, allowing the new business to take the assets and goodwill, while leaving the liabilities with the vendor to resolve.
However, when conducting the accreditation, required by the new employer to hire the migrant staff, INZ would not take into account the previous business's history. They wanted evidence of future contracts, of at least two years, or funding in place to run the business in the extremely unlikely situation that the established goodwill and clients would no longer be there. We believed it was a request that ignored the obvious, seemingly imposed with little understanding of how business works. Even then, after accreditation was obtained, the new employer would need to apply for a job check, to show there were no citizens or resident visa holders available, which would usually require an advertisement to be run and may have required interaction with Work and Income NZ. Finally, once that was completed, the migrant would need to apply to either vary their current visa to the new employer or to apply for a new Accredited Employer Work Visa (AEWV).
When I went to INZ, this was already an issue, with how INZ was handling the accreditation of companies that may have been new, but had access to assets, goodwill, and current clients for established brands that were decades old. INZ would ignore that history solely as it relates to the previous business owner, not the new one.
Since then, we have seen accreditation, job check and work visa processing times extend dramatically. We're now looking at 2-3 months for most accreditations, job checks at 3 months, and work visas at 3-4 months. For a purchaser of a company, this meant starting the process 9 months before settlement, which is unrealistic in almost all situations. It leads to employees either being unable to work impacting the new owner, working in breach of their visa and risking their status in New Zealand, or employees continuing to be employed by the former company, which is probably an unlawful situation where they would work for the new company while being paid by the old, risking the accreditation status of both companies.
We saw this coming and went to INZ. INZ's response was that there wasn't an issue. We're unsure of how they came to that view.
On 30 October 2024, the Minister announced a change to policy that would help solve part of the issues we had raised.
From 6 November 2024, if a business is being sold or merged, but the AEWV holder remains working in the same location and role, the AEWV holder may immediately apply for a job change.
The new employer will need to either hold or have applied for accreditation. The job change can be granted while the accreditation is being processed, allowing the worker to remain at work while the employer's accreditation is being processed.
There will be no need for the new employer to apply for a job check, meaning no advertising, communication with Work and Income NZ, and no need to prove that there are no citizens or resident visa holders available.
This is certainly an improvement and one that is ten months later than it should have been. Senior INZ staff, those setting the policies, need to take a look at its processes and see if they are functional within a business context. We still see a lot of questionable requests being made of businesses, ones that cause delays to the process and create further workload for INZ staff. At least this one issue now has a solution.
If you're considering buying a business and need guidance on how these immigration changes may impact your situation, get in touch with our team.
DDI: 09 306 6726
Email: ahunt@mcveaghfleming.co.nz
© McVeagh Fleming 2024
This article is published for general information purposes only. Legal content in this article is necessarily of a general nature and should not be relied upon as legal advice. If you require specific legal advice in respect of any legal issue, you should always engage a lawyer to provide that advice.
