Stop punishing compliant employers with rules designed for exploiters

A small story with a large point

Anna Vu has worked in Whangārei for 12 years and employs three siblings she recruited from Vietnam to run AV Beauty Spa. Her older sister gained residency through the 2021 pathway. Her two younger siblings hold work visas expiring in early December 2027 and, as RNZ reported, face a far harder path because they do not meet the English language requirements for residence.

Vu, who suffers from lupus nephritis, says her siblings have kept the business running through periods when her health forced her to slow down. She recently invested in larger premises with room for 10 staff and has been advertising for replacements. Most trained nail technicians, she says, would rather set up on their own than work for someone else. As she put it in a letter to local MP Shane Reti, she is being asked to replace people who are “already trained, trusted, productive and fully integrated” with workers she cannot find.

This is not really a story about one salon. It is a story about what happens when risk-based immigration policy collides with the operational reality of small service businesses.

The red list is a dead end by design

The barrier is not just English. Nail technicians sit on Immigration New Zealand’s “red list” of six high-risk role categories, alongside beauty therapists, salon managers, hairdressers, massage therapists and various retail and hospitality managers. Workers in these roles are shut out of both new skilled residence pathways introduced from mid-2026.

Immigration adviser Katy Armstrong of Into NZ Immigration told RNZ that Vu is “in the eye of the storm. Vietnam is considered high risk, beauty therapists are on the high-risk list.” The only residence route left for a red-listed nail technician is a tertiary degree in any field plus the English requirement. A ministerial waiver exists but is granted reluctantly, and appeals are expensive and uncertain.

Armstrong was blunt about the tension. Vu, she said, “sounds totally legitimate” but works in a sector associated with poor employment practices and exploitation.

The exploitation the rule was built to stop is real

The policy did not appear from nowhere. In February 2025, the Employment Relations Authority ordered a Wellington nail salon to pay seven Vietnamese migrant workers more than $230,000 for lost wages and humiliation. Some had been paid as little as $200 a week despite contracts promising $29.66 an hour.

Across the whole system, the numbers show why regulators are twitchy. As at 31 July 2026, Immigration NZ recorded 9,280 complaints against accredited employers since July 2022, with 1,563 accreditations revoked and 1,019 suspended. The red list is a direct response to that pattern.

The problem is that the instrument is blunt. Vu’s siblings pay tax, work weekends and public holidays, and are embedded in a 12-year-old business. The rule cannot tell them apart from the operators it was written to catch.

The English wall and the three-year cliff

The IELTS 6.5 requirement for skilled residence is university-entry level and was designed to protect workers from isolation. In practice it falls hardest on migrants from non-English-speaking countries in hands-on trades. A Tauranga manufacturer told 1News in September 2025 that losing a critical CNC machinist over the test would mean “we’d be closing the doors” because a third of its machinists were migrants.

Compounding it, April 2024 changes cut the maximum stay for lower-skilled roles from five years to three. The workers who arrived when borders reopened in 2022 and 2023 are now hitting expiry with no residence route. For a business that trained them, that is a staffing crisis with a fixed date.

The government’s framing does not map onto that reality. In November 2025, RNZ reported that Immigration Minister Erica Stanford had urged businesses to prioritise unemployed New Zealanders on pain of losing accreditation. For a salon where trained local technicians simply are not applying, that is cold comfort.

What the churn actually costs

The new pathways are genuine relief for eligible workers. MBIE estimated the Skilled Work Experience and Trades pathways could benefit 3,500 to 9,000 migrants in their first year. But the red list explicitly excludes Vu’s staff from both.

Employers have warned for years that the instability is itself a cost. In April 2024, the Employers and Manufacturers Association’s then head of advocacy Alan McDonald said “continual tinkering” with settings was off-putting for skilled migrants and confusing for employers trying to do the right thing. He noted that an ageing population and heavy youth emigration to Australia mean some roles genuinely cannot be filled locally.

The system now has more than 205,000 approved applications and over 95,000 current visa holders. Somewhere in that churn is a compliant operator being asked to fire trained staff and replace them with people who do not exist. The next round of red-list reviews will decide whether policy can distinguish the exploiters from the businesses it is quietly forcing to close.

Sources

• ‘Eye of the storm’: Business owner’s fight to keep nail tech siblings in country (2026-08-21)
• Accredited Employer Work Visa (AEWV) key information and statistics (2026-08-12)
• Migrant nail technicians to receive $230,000 in compensation from Wellington nail salon (2025-02-28)
• Skilled migrants at risk as English test barrier threatens BoP business (2025-09-27)
• Employers, migrant advocates rail against local job priority warning (2025-11-07)
• EMA says immigration changes might have unintended consequences (2024-04-10)