Once again we have an interesting month in New Zealand law. Join us as we run through some of the main employment law updates and recent interesting cases around the updates, as well as new legal protections at work. We’ll finish off with everyone’s favourite – tax time updates! Let’s dive in.
Minimum wage rises officially
As of 1 April 2019, minimum wage has officially risen to $17.70 NZD per hour. This also means that the other minimum rates, like the starting-out and training hourly wages are also increased, now at $14.16 NZD per hour. Remember that if you are a business employing anyone on minimum wage, you’ll need to increase wages as of 1 April, or retroactively if you haven’t done so already at this point. This page has some helpful information and places to turn if you aren’t sure how to proceed with the new rates.
These new rate hikes aren’t the end, either. The New Zealand government is delivering on a promise to raise the minimum wage to $20 by 2021, and they are well on their way at this point. This increase in April has by far been one of the biggest in recent history, which has many minimum wage workers hopeful and excited, as the extra $1.20 per hour can add up to $48 per week for a 40 hour week. Other critics think that this still doesn’t add up to a living wage, meaning that for someone on this wage with bills, rent, transportation costs and perhaps a family, would struggle or be unable to thrive on this wage. And some employers are wondering how they will be able to implement the new wage into their budget.
Part of the reason for these increases is to tackle poverty. Poverty in New Zealand is a real struggle, with children experiencing poverty at an alarming level. Some of the latest numbers show child poverty at 27% of Kiwi children. While the government benefits have been trying to tackle the problem with things like hardship grants or housing assistance, there is still much to be done, and the hope is that the minimum wage increase will significantly aid those experiencing poverty.
The law in the news lately has shown a startling rate of worker exploitation across New Zealand. In March of this year, a dairy farmer was shown to have been exploiting a migrant worker by drastically underpaying them. While deeply unfortunate, underpayment in more rural areas happens quite often, so this case is a good reminder for any employer that the consequences for underpayment can be severe and swift. The dairy farmer in question will now be required to pay back $26,000 NZD to the worker, and an additional $15,000 in fines.
A bakery in New Zealand was also inspected and found to have underpaid two migrant workers, and are now facing over $115,000 for the errors. The Employment Relations Authority (ERA), typically works to resolve workplace issues, but can also undertake investigations into situations like this. If any type of underpayment is found, a business will almost always be required to pay back the underpaid wages for as long as it went on, as well as face hefty fees. Please remember this if you are a business wondering how to implement the minimum wage, as the consequences are not worth the small savings in wages.
Domestic Violence protections
The Domestic Violence protections have been officially implemented as of 1 April 2019. This is a big step forward for New Zealand, and has been a long time coming. The new protections mean that employers are required to allow 10 days of paid domestic violence leave per year to employees who qualify. Employees who wish to use the leave may be required to show proof to the employer, but reasonable exceptions may come into play and should be allowed by the employer. The pay rate is the relevant daily pay, which is essentially what an employee would have made if they were able to work.
Employers should remember that domestic violence leave is separate from annual leave or other types of leave, and can be taken first before annual leave. If the employee has extenuating circumstances and wishes to use annual leave after using up all ten days of domestic violence leave, this can be decided by the employer. Remember as well that just as employees can convert their annual leave to sick leave if they become ill on holiday, they can also convert their annual leave to domestic violence leave if applicable. More information about implementing this leave can be found here.
Tax time is upon us in New Zealand, and there are a few changes for employers and employees alike. The biggest change is the implementation of myIR, which will hopefully make the whole process simpler and easier for everyone by making many processes automatic. Employers are now mandated as of April this year to complete payday filing, and may also be required to file electronically on myIR. Employers will also need to be filing employment information on a payday basis instead of a monthly basis as was previously required. Essentially, this means that you’ll need to send in employment information, new or returning employee information, and the normal pay cycle as well each payday.
Many of these updates mean a lot of changes for employers, and it can be quite stressful understanding how to implement them. It can also be a bit terrifying knowing the fines and repayments that can occur if you do not implement them correctly. If you do not have a strong Human Resources team or someone with employment law knowledge, we highly recommend educating yourself as a business owner and taking courses in things like the Holiday Act or payroll to ensure you are following all the rules.