The recent revisions to the Recognised Seasonal Employer (RSE) policy settings by the New Zealand coalition government prompted significant discussion at the annual RSE conference. This event drew a large crowd of RSE employers, industry stakeholders, government officials, and representatives from Pacific nations.
Employers expressed optimism regarding the policy adjustments, which are expected to lower their costs of participation—a key concern that they and industry groups have been advocating for. Despite the 17 years of the RSE scheme, it continues to be mainly utilized by small producers, with 62 percent of the 179 active employers in 2024 hiring fewer than 50 workers each, and half of those hiring fewer than 20.
For many smaller producers, increasing employment costs and dwindling profit margins, particularly following the pandemic, have raised concerns about the sustainability of their participation in the RSE scheme. In contrast, the adjustments to policy settings affecting take-home pay have sparked worries among Pacific countries. Changes include eliminating the requirement for employers to pay RSE workers 10 percent above the minimum wage, removing the guaranteed payment for 30 hours of work per week, and reinstating worker accommodation charges.
Starting in September, the 10 percent wage loading above the minimum wage will apply only to RSE workers in their third season and beyond. This change seems aimed at acknowledging the skills and experience of returning workers, a request from Pacific nations. However, it presents issues such as the fact that many workers from these countries average less than three seasons.
While Vanuatu’s workers tend to return for about three seasons, those from Samoa and Tonga average 2.9 and 2.8 seasons, respectively. In contrast, workers from Asian countries tend to return for an average of more than three seasons and will benefit from the higher wage.
Additionally, tying wages to the number of seasons worked might incentivize workers to return more frequently to New Zealand, potentially at the expense of their families back home. It also does not necessarily correlate with skills or productivity, as more skilled workers might be in their second season and could be overlooked in wage considerations.
Another significant change to RSE settings is the adjustment in guaranteeing payment for at least 30 hours of work per week, initially implemented during the pandemic to assist stranded workers. The new policy mandates that RSE employers guarantee payment for a minimum of 120 hours over four weeks—a dilution of protections that raises questions about competitiveness with Australia.
Previously, New Zealand distinguished its RSE scheme from Australia’s Pacific Australia Labour Mobility (PALM) scheme by emphasizing robust employer-employee relationships and strong worker protections. With these recent changes, it appears Australia is now providing both higher wages and stronger worker protections. Unlike the RSE scheme, PALM requires employers to ensure a minimum pay threshold and cover accommodation and transport costs if they cannot provide adequate work hours.
Despite the recent adjustments, it is essential to address employers’ valid concerns regarding rising costs, particularly for smaller producers, and to ensure the scheme remains viable for future recruitment from the Pacific. However, the lack of engagement with Pacific stakeholders during this process has raised concerns. Stakeholders are still awaiting updates from a policy review that began before the pandemic.
Vanuatu’s High Commissioner to New Zealand, Jimmy Nipo, emphasized the need for a balance between the benefits for New Zealand and the Pacific nations, highlighting the importance of consistent and open communication to maintain vital bilateral relationships.