Global Updates – New Zealand, Saudi Arabia, Switzerland, and Vietnam

NEW ZEALAND – Changes to the Essential Skills Work Visas Will Affect Visa Duration and Dependent Privileges

Effective 28 August 2017, Immigration New Zealand (INZ) introduced remuneration bands for work visas. The remuneration bands will affect how long applicants can stay and whether their families can stay too.

What was the current situation?
Pursuant to the changes,

  • If a job is ranked at Level 4 or 5 on the ANZSCO, then a work visa is granted for 12 months. However, the work visa can continually be renewed, every 12 months;
  • If the job matches with an occupation that is ranked at Level 1, 2 or 3 on the Australian and New Zealand Standard Classification of Occupations (ANZSCO) then a work visa is granted for at least three years. The work visa can continually be renewed; and
  • Essential skills visa holders are currently able to obtain visas for their partners and dependent children, if their visa is for more than six months. The partners and children can stay in New Zealand, as long as the main applicant.

How will the remuneration bands affect work visa duration?
Work visas are now valid for the periods listed below:

  • From 28 August 2017, essential skills visa applicants earning less than NZD 19.97 per hour (NZD 41,538 per annum) will only be eligible for a 12-month work visa. This is regardless of the skill level of the job. Further, after three work visas (three years in New Zealand), these applicants must leave New Zealand for at least 12 months;
  • Applicants earning between NZD 19.97 and NZD 35.24 per hour and in ANZSCO Level 4 and 5 jobs will also only be able to obtain 12-month work visas. Also, after three years, these applicants must also leave New Zealand for at least 12 months;
  • Applicants earning between NZD 19.97 and NZD 35.24 per hour and in ANZSCO Level 1, 2 or 3 jobs will still be able to obtain three-year work visas. They will be able to continue to renew the visas and will not have to leave New Zealand for 12 months, every three years; and
  • An applicant earning more than NZD 35.24 per hour will be able to obtain a five-year work visa, regardless of the ANZSCO level of his or her job.

What is changing for partners and children?
Essential skills visa applicants earning less than NZD 19.97 per hour (NZD 41,538 per annum), or earning between NZD 19.97 and NZD 35.24 per hour and in ANZSCO Level 4 and 5 jobs, will not be able to support a partner or dependent children to stay in New Zealand.

How will the changes affect existing work visa holders?
When work visa holders earning less than NZD 19.97 per hour, and/or working in ANZSCO Level 4 or 5 jobs, apply for their next work visa, it will only be granted for 12 months. After three of these visas, the employees will have to leave New Zealand for at least 12 months.

However, the good news is that the three years that these employees can spend in New Zealand will start with their next visa application.

INZ is expected to put in place transitional arrangements which may allow an employee’s partner and children to remain in New Zealand as long as the employee is lawfully in New Zealand. This should mean that partners and children can stay here for three years, from the next visa application.

However, unless the employee has moved into a job paying more than NZD 19.97 per hour and at ANZSCO Level 1, 2 or 3, the partner and children will have to leave New Zealand after three years.

If the employer wants to continue the employment beyond the three years, they need to consider career development pathways to allow the employee to progress to earn more than NZD 19.97 per hour and move into an ANZSCO Level 1,2 or 3 job.

It is important to remember that to renew an employee’s essential skills work visa, an employer must have made a genuine attempt to find a New Zealand national for the job, and must demonstrate that no suitable or readily trainable New Zealanders applied. If a job is at ANZSCO level 4 or 5, the vacancy must be listed with Work and Income.

ANZSCO is a system managed by the Australian and New Zealand governments. It classifies and ranks jobs.

For example, an engineer is ranked as having an ANZSCO Level 1 job. This means that an engineer needs at least 5 years of work experience or a degree to be able to get a work visa, which would then be valid for either three or five years.

A builder’s laborer is ranked as having an ANZSCO Level 5 job. This means that a laborer only must prove he or she has finished secondary education and perhaps some on-the-job training to be able to get a work visa. However, a builder’s laborer will only get a work visa for 12 months, each time he or she applies.

Action Items
Employers of work visa holders, or prospective applicants, earning less than NZD 19.97 per hour and/or working in ANZSCO Level 4 or 5 should consult with their immigration advisor at McCown & Evans for advice on how to proceed. Note that substantial changes to the Skilled Migrant Category are also expected to take effect on 28 August 2017. See our previous alert here.

SAUDI ARABIA – Stricter Saudization Targets

Effective 3 September 2017, the Ministry of Labor and Social Development has implemented a new version of its Nitaqat grading program for companies, meaning stricter Saudization requirements for businesses.

What is Changing?
Under the new version of the Nitaqat system, which grants firms with higher ratios of Saudi workers preferential treatment, much higher percentages will be needed to qualify for the higher categories.

The new Saudization matrix is complex, with companies ranked into six bands from Premium, High Green, Medium Green, Low Green, Yellow, and Red, and grouped by industry sector and company sizes of Giant, Big, Medium (A, B, or C), and Small. Saudization levels – the percentage of the company’s workforce consisting of local workers – are then set at various levels based on the industry and size of the company.

Nitaqat now applies to businesses with more than six employees (previously it was more than ten).

Previously, all companies in any of the Green bands – High, Medium, or Low – are given access to the block visa scheme. Under the new rules, only companies ranked in the Platinum and High Green bands will be eligible to apply for “block visas.”

Companies that fall below these two highest Nitiqat bands will be limited to filling positions with foreign workers already in the country with valid work authorization. The company needing the foreign worker will have no other option but to recruit the foreign worker away from another company and submit a transfer of sponsorship application to have their work authorization transferred.

As the block visa is the principle route for companies to bring needed foreign labor to Saudi Arabia, this will place tremendous pressure on companies to ensure that they maintain the applicable Saudization levels to qualify for the Platinum and High Green bands.

What is Nitaqat?
Nitaqat is a program of Saudization, to increase employment of Saudi nationals in the private sector, which was first introduced in 2011, giving companies privileges, requirements, or limitations in the visa process for their foreign workers based on the percentage of their workforce made up of Saudi nationals.

The Saudization drive is part of the ambitious Vision 2030 plan of broad-based reforms designed to develop new business sectors, diversify the economy away from oil dependence, and create more local private sector jobs. Ninety percent of the private sector jobs in Saudi Arabia are held by foreign nationals, and the local unemployment rate has now risen above 12 percent. Vision 2030 aims to reduce of local unemployment to under seven percent by 2030.

In the summer of 2016, it was proposed that a new ‘balanced Nitaqat’ would be introduced where organizations would effectively be given more credit for employing Saudi nationals into senior and well-paid positions and for employing female Saudi nationals. However, implementation of “balanced Nitaqat” has been postponed.

Action Items
Employers in Saudi Arabia should check their compliance with the forthcoming new requirements.

SWITZERLAND – Quotas for EU/EFTA L and B Permits Exhausted for Third Quarter of 2017

The quota for L and B permits for the third quarter of 2017, for short-term assignees from European Union (EU) / European Free Trade Agreement (EFTA) countries, has been filled.

Who is Affected?
New, incoming EU/EFTA nationals who are assigned to Switzerland but remain on foreign employment contracts will not be issued L or B permits until 1 October 2017.

Who is Not Affected?
The quota for permits not subject to quotas, such as the 120-day permit and the 4-month short-term permit, are not affected. Quotas for non-EU/EFTA nationals are also not affected.

Cantonal Variations
The cantonal procedures in dealing with the situation vary:

The authorities will grant permit approval for one month for the time being (if the applicant has not already used four months in the past 12 months). From mid-September, applicants can request a quota-based permit for the duration after expiration of that month, and should be able to join the applications which fall under the next quarter, from 1 October 2017 onwards.

Basel and Geneva
The authorities will establish a preliminary decision which will allow assignees to start work. The quota will be issued on 1 October 2017.

The canton of Bern has a delay in processing at the moment, and is not likely to be able to process pending applications for quota-based permits earlier than 1 October 2017 in any case.

The authorities will establish a preliminary decision which will allow assignees to start work. The quota will be issued on 1 October 2017.

The canton of Vaud refers applicants to online registration, which can be used as a temporary solution until 1 October 2017 (if the applicant still has registration days left).

The authorities in Ticino will not issue any preliminary or temporary approvals. Any quota-based permits can be applied for only for assignments starting from 1 October 2017.

All other cantons
Still under investigation.

The Swiss government decided to keep the reduced amount of permit quota for EU/EFTA nationals on assignment for the year 2017 (see our alert of 13 October 2016). The quotas are allocated to the cantons on a quarterly basis.

Action Items
Allow for possible delays with sending EU/EFTA nationals to Switzerland. Contact your immigration advisor at McCown & Evans for any new EU/EFTA national assignments to Switzerland, as pending applications will be treated differently depending on the canton.

VIETNAM – New Work Permit Eases Criteria for Intra-Company Transfers

Effective immediately, the Ho Chi Minh City (HCMC) Labor Department is accepting applications for a new category of work permit which eases key requirements for intra-company transferees.

The new classification, called “Manager, Executive Director, Expert and Technical Worker”, only requires applicants to have at least twelve months of working experience in a company of the same group, rather than specifically in the Overseas Investor Entity (parent company).

Additional Notes

  • The new classification is only accepted by the HCMC Labor Department. It is unclear when and if it will be adopted by other provinces.
  • The standard intra-company transfer (ICT) category is still in effect.

The requirements for the new Manager, Executive Director, Expert and Technical Worker category of ICT permits are as follows:

  • The assignment letter still needs to come from the Overseas Investor Entity but need only state the entity within the business group that the applicant will be sent from to Vietnam;
  • The assignment letter also should mention the duration of the employee’s experience at the company;
  • Under the new work permit classification, there is no need for a local employment contract; and
  • The required working testimonial document can come from an entity in the group related to the investor but must contain the same information as the assignment letter regarding the location from which the transferee will originate and the duration of working experience with the company.

Since the beginning of 2017, under the standard intra-company transfer (ICT) rules, companies who want to send their employees on assignment to Vietnam within the same group of companies are required to produce an assignment letter from the Overseas Investor Entity (the entity listed on the Vietnamese business licenses).

Also required for an intra-company transfer is that the employee must have at least 12 months working experience for the Overseas Investor Entity. In many cases, multinational companies sending foreign employees to Vietnam cannot meet this requirement as the employee normally is being transferred from another entity or location within the business group.

Under the standard ICT route, if the employee is not being transferred directly from the Overseas Investor Entity, the company must instead send the employee to Vietnam as a local hire, not as an intra-company transfer.

Action Items
Employers sending their employees to Vietnam within the same group of companies should consult with their immigration advisor at McCown & Evans for the latest updates and advice.