Immigrants are entering agreements with employers to pay their own taxes and wages in order to obtain New Zealand permanent residence, and the "scheme" even has its own name - PYO (pay your own).

Immigration New Zealand says it is investigating a case where such a scheme has allegedly been used to help a migrant to gain residency, and the agency is asking others with information about the scam to come forward.

Employment advocates say the practice is rampant and has been going on for years, with possibly hundreds gaining residence by paying their own way to meet immigration requirements for skilled migration.

The National Distribution Union, which has seen nine workers who had been in PYO arrangements with their employers in 2008, says there could have been hundreds of cases over the years.

"You just don't hear much because it is often kept within the migrant communities, with employers who are often migrants themselves entering into such arrangements with migrant employees from their own community," said Dennis Maga, the union's migrant workers support co-ordinator.

This week, South African migrant worker Jacqueline Sydow lost her personal grievance case in the Employment Relations Authority after alleging that her employer, Executive Recruiters International, had asked her to pay her own taxes and wages to support her residency application.

The Weekend Herald is aware of at least two other cases, which are in the mediation stages, where migrant employees are claiming they were made to pay their own salaries, taxes and fees to their employers in exchange for their support for residence applications.

"It's hard to say how widespread the practice is because you only hear from just a few, because many would not talk about it because they think it could jeopardise their immigration status or applications," said Beven Chuang, the Department of Labour's settlement support co-ordinator in Auckland.

"Some think such arrangements are an easy path to residency and are not aware that they are breaking the law, but others clearly go in with their eyes wide open."

Immigration New Zealand chief Nigel Bickle said: "If people have information about these types of cases, we need them to come forward ... for us to investigate."

Mr Bickle said this could be done either by calling 0508-558-855 or contacting the nearest Immigration New Zealand office.

"If we find sufficient evidence of this occurring, we would consider a number of options, including revocation of permit and prosecution."

An immigrant, who wanted to be known as Krystal, said she gained her residence only after paying close to $50,000 to her employer for her own wages and tax over nearly two years.

"I was desperate because I couldn't find a job and my job search visa was near expiry, so I went to a few businesses offering to pay them to employ me, and one accepted," said Krystal, who is now unemployed.

David Soh, editor of the local Chinese newspaper Mandarin Pages, said Immigration New Zealand's unrealistic expectations in its skilled migration requirements contributed to the practice, because it made it "near impossible" for would-be migrants to find jobs that could support their residency applications.

Employers were expected to pay the market rate - the same amount they would pay a local - when employing migrant workers, or hire them at management level in order for them to obtain residency.

"It is just not realistic for someone who is new to the country that is lacking in local knowledge and experience to be commanding the same rate, or even be employed straight into management."

An employer, who has supported a migrant worker's residency through the PYO method, says he did not see anything wrong because "everyone does it". He spoke on the condition that the Herald did not identify him.

HOW IT WORKS

• A migrant secretly pays an employer a large sum of money - say $50,000 - to cover the cost of his or her annual wages, including tax.
• The employer returns the take-home pay to the worker and pays the tax portion to the Government.
• The worker uses the fake wage payments as proof of employment to gain permanent residency.

(Source Lincoln Tan, NZ Herald)