Are Your Overseas Workers Entitled to Work?

Posted: 28th March 2011

If you employ overseas workers, changes to the Immigration Act that came into effect on 29 November 2010 will have an impact on your obligations in the future. 

 The main change for employers is that they will need to show they have taken reasonable precautions to check the job applicants are entitled to work for them.  Holding a completed tax code declaration form will no longer be a reasonable excuse for employing a person not entitled to work in New Zealand. 

Failure to take reasonable steps can give rise to significant penalties of up to $50,000.  Further, once you have employed someone, please make sure you deduct the correct amount of tax.

 To assist employers in determining whether a person is entitled to work in New Zealand, Immigration New Zealand has developed a new online system, VisaView, which allows a New Zealand employer to check whether a person who is not a New Zealand citizen can work in New Zealand.

 An employer will be able to check whether a person is able to work for them, view any conditions attached to the particular visa, and see the expiry date of the visa for the prospective employee.

Oonce an employee's work status has been confirmed, employers are required to deduct withholding tax at 15%, unless the recipient holds a certificate of exemption.

 Persons who are entitled to work in New Zealand are:-

• New Zealand citizens, including nationals of the Cook Islands, Niue and Tokelau.
• New Zealand residents and permanent residents.
• Holders of Australian current permanent resident visas who are granted a New Zealand Residents Visa on arrival.
• Australian citizens who enter New Zealand on a current Australian passport.
• Non New Zealanders holding a valid visa with work entitlements.

If you have any queries regarding the above, please contact Martyn Henderson on 09 308 4050 or sudhir.lala@tbag.co.nz