What employers need to know about last year’s changes to NZ employment law

On 1 April 2016, important changes to New Zealand employment law came into effect.

The changes help promote fairer and more productive workplaces by providing enhanced protection and benefits for employers and employees alike. For instance, they strengthen minimum employment standards, such as wage and holiday entitlements.

At HRtoolkit, we are still receiving requests for information about these changes, so we produced this blog to make sure you are aware of them. Please share it with anyone else who you think needs to know.

Key changes to the legislation include amendments to zero-hour (otherwise known as no guaranteed hours) contracts, a new infringement notice regime, requirements for clearer record keeping, plus tougher sanctions and penalties for breaches of the legislation. They fall into four categories, as outlined below.

For most businesses there won’t be an increase in compliance costs as a result of the changes as their focus is on organisations not currently meeting their obligations. These businesses need to become compliant or risk facing financial penalties.

• When hiring, employers must guarantee to give employees agreed hours of work
• Employers won’t be able to expect employees to be available to work with no guarantee of hours without paying reasonable compensation
• Employers won’t be able to cancel a shift without giving employees “reasonable notice” or compensation, both of which must be set out in an employment agreement
• Employers won’t be able to make unreasonable deductions from wages
• Employers won’t be able to unreasonably restrict an employee’s secondary employment

Clearer record keeping requirements are now required for wages, time, holidays and leave and these have been made consistent across all employment legislation.

Previously, minimum entitlements were inconsistent, which led to difficulties in assessing whether low-salaried and piece workers were receiving adequate pay.

• The key requirement is that employers can produce a record of the number of hours worked each day, and the pay for those hours, in an easily accessible form
• Additional hours worked by employees on salaries doesn’t generally need to be recorded, but minimum employment entitlements still need to be met
• There is flexibility around the format for records, so long as they are legally compliant

• Information can now be shared between regulators (Immigration NZ, IRD and the Companies Office) to improve the ability of Labour Inspectors to identify and investigate alleged breaches of employment standards
• Labour Inspectors can now request documents or records from employers including financial or bank statements, but all information shared (both business and personal) will be protected by the Privacy Act

Labour Inspectors will use infringement fees for clear-cut breaches of obligations to keep records, but serious breaches, such as exploitation, will now be heard at the Employment Court and carry heavier penalties.

Employees are also able to seek penalties at the Employment Relations Authority for any entitlement breach.

• Businesses found guilty of moderate breaches will be fined $10,000 for an individual and $20,000 for a company
• Businesses found guilty of serious breaches will be fined up to $50,000 for an individual and more than $100,000 for a company
• Employers will be publicly named if the Employment Relations Authority or Employment Court finds they have breached minimum standards
• Individuals can be banned as a manager if they commit serious or persistent breaches of employment standards
• Directors, senior managers and legal advisors can also be held accountable for breaches of employment standards

For more information on these changes, visit Employment New Zealand or contact us at HRtookit.