Many of you would be aware that when the labour-led coalition was voted into government, they had pledged to put in place a number of drastic changes to the employment relations scene in NZ. Well, they haven’t held back and many of these have now concluded their swift path through parliament.
Some of the new laws will seem familiar to many of you, because essentially, they turn the clock back on many of the changes the National-led government had previously implemented when it was their turn to be the chief legislators not so long ago. Some of these new laws will have little or no impact on the day-to-day running of your business, while some adjustments may need to be made in order to comply with some others. However, like with any laws, ignorance is no defense, so at the very least you need to be aware of their existence and potential implications.
I outline below some of the recent law changes that I think might impact most small-to medium sized businesses and what I think you could be doing about them.
If you have any questions or concerns about these or any other employment relations challenges you may be facing, please do not hesitate to get in touch – phone 021 074 4610 or email- [email protected]
Changes to the 90-day Trial Period
Effective from the 6th May 2019, the use of the 90-day trial period will be available only to businesses with less than 20 employees. Therefore, if your business has less than 20 employees (including all casuals) there should be no change to your operation, although you must continue to proceed with caution whenever considering terminating someone’s employment under this clause.
If you have close to, or more than, 20 employees you will need to amend your employment agreement template and insert a probationary clause instead of the 90-day trial period clause. You will also need to manage this initial period differently if things do not progress as well as expected – If you need more guidance on this please let me know.
Changes to Rest and Meal Breaks
Also effective from 6th May 2019, the right to paid morning and afternoon rest breaks and unpaid meal breaks will be restored and can no longer be bought out. Moreover, in the absence of employer and employee reaching an agreement on exactly when to take these breaks, there are far stricter limitations as to when they must be taken.
Have a look at your employment agreements and your daily practices to make sure that everyone has the right to these breaks and that you have clearly registered your agreement as to when and how they will be taken. If not, then you will need to amend your employment agreement template for any new employees and implement a variation to existing employment terms for current employees. I can assist you with the necessary variation forms and clauses if you are unsure of how to implement this.
Introduction of the Domestic Violence – Victims’ Protection Act 2018
This new piece of Legislation came into effect as from 1st April 2019. In brief, it puts in place new legal protections to anyone affected by domestic violence, giving them the right to 10 days of domestic violence leave per year and the ability to ask for short term flexible work arrangements for up to 2 months, that go beyond the rights already enjoyed under the flexible working arrangements outlined in the Employment Relations Act.
This law also updates the Human Rights Act by making it unlawful to discriminate against someone because they are, were or might be a victim of domestic violence. This includes discriminating against a job applicant who may be a victim of, or may care for a child who is or was a victim domestic violence.
There may or may not be any immediate implications of this new law for your business. However, with NZ’s relatively high prevalence of reported domestic violence, the likelihood of one of your employees being or becoming a victim of domestic violence can never be discarded or ignored. Therefore, it is important that you are aware of the law and the rights and responsibilities it places both on yourselves as employers and on your employees.
It is also good practice to include a clause on Domestic Violence Leave in either your employment agreements or in your code of conduct manual.
If you want more information about Domestic Violence Leave please get in touch.
Significant Rise in Minimum Wage
As has happened practically every year, the minimum wage has been raised effective from the 1st April. Nothing new here, except that the increase this year to the new minimum wage of $17.70 per hour has been a relatively large increase.
The implications to your business can be many, so there are a few things that you need to be aware of besides the obvious one of making sure that none of your staff are paid less than $17.70 per hour worked. Apart from the positive impact of higher minimum wages for many people, there is always a financial knock-on effect throughout many businesses of raising the lower wages.
One thing to consider is income relativity between your own staff with different responsibilities or levels of performance, or between what you pay compared to the market rate. The ‘sudden’ increase of your lower paid staff might mean that there is now little difference between what they earn and what other staff who may have previously been given a raise for better performance or higher responsibilities. Similarly, if you attract new staff because you pay higher than the minimum wage, this point of difference may have just shrunk or disappeared. So, you may need to consider retaining a level of relativity if you want your wages to remain a positive incentive for improved performance or higher responsibilities.
Finally, you must also consider staff with a salary of around $40,000 per annum, meaning they would be earning close to the minimum wage if this were to be broken down to an hourly rate. This is important because the majority of salaried employment agreements state that overtime is not payable, but that employees are sometimes expected to work longer hours to get the job done. Remember that salaried workers must also still earn at least the minimum wage for each hour worked, which means that if they regularly work 30 minutes extra here and there, the amount they earn per hour worked may easily dip below the minimum wage, thus placing you at serious risk of being found to be in breach of minimum employment standards.
To avoid this, make sure that all staff regularly complete a time sheet of the hours they work so you can show that you are paying at or above the minimum wage per hour