The adult minimum wage is going up from $14.75 an hour to $15.25, with
the starting-out and training rates rising too. Here’s what you’ll
need to know for your business.
When:
1 April 2016
What: The
new minimum wage rates are:
- Adult — $15.25 an hour
- Starting-out — $12.20 an hour (up from $11.80)
- Training — $12.20 an hour (up from $11.80)
- Starting-out and training minimum wages are 80% of the adult minimum
wage.
Read this Minimum
pay page for a summary of who can earn the different rates.
Why:
Government must by law review these pay rates every year.
What you’ll
need to do: You and your staff can agree to any wage above
the minimum rate that’s most appropriate to them. You’ll also need to
update your employment agreements to reflect any wage changes.
If you pay any of your staff the minimum
wage, you may need to amend their employment agreements to reflect the new
rate. Use the Employee
Cost Calculator to get an idea of how much the increase will cost your
business. You can also use the calculator to estimate costs of hiring a
new employee.
If
you pay any staff minimum wages, recalculate your budget for the rest of
the year to account for the increased wages.
Fair pay:
In addition to paying the minimum wage or higher, you’ll need to make
sure your pay policies are as fair as possible. Pay your staff for actual
hours worked — that’s at least the minimum hourly wage for any extra
time worked over an eight-hour day (excluding meal breaks).
ZERO
HOUR CONTRACTS
Employers can no longer offer “zero-hour”
contracts. You must agree hours of work with each employee and put the
details into their employment agreement. You also can’t require
employees to be available for work above those agreed hours without a
genuine reason and reasonable compensation.
Find out more in article
on hours of work.
Cancelled shifts —
Employers can’t cancel a shift without giving workers reasonable notice
or reasonable compensation.
Find out what this means for your business
in article
on shift cancellation.
PARENTAL
LEAVE FROM 1/4/2016
New laws are increasing parental leave entitlements. Find out what
impact it will have on your business.
When:
1 April 2016.
What:
Parental leave payments are increasing from 16 to 18 weeks.
The new law extends parental leave payments to more workers,
including:
- casual and seasonal workers
- those with more than one employer
- those who have recently changed jobs.
Previously only biological or formal adoptive parents could claim
parental leave payments. The law change extends this to others who take
on the permanent care of children aged under six, eg home-for-life and
whāngai arrangements.
Read more about the types
of ‘primary carer’ now eligible on the Ministry of
Business, Innovation and Employment website.
Since April 2010, business operators in the horticultural and
viticultural industries hiring a contractor for the supply of labour have
been required to deduct tax from the contractor's payments at 15c in the
dollar. This is for any type of contractor hired, including individuals,
partnerships, trusts or companies.
There are two exceptions to this rule. One, if the contractor holds
a valid and current Certificate of Exemption, no tax is deducted from the
contractor's payments. Two, if the contractor holds a current Special
Tax Code Certificate and presents this, tax is deducted at the rate shown on
the Certificate.
IRD have indicated that in their review activities they have noted a
number of business operators are not complying with these regulations and
deducting tax where it should be. They have also indicated that where
a grower (or contractor hiring a subcontractor) knowingly fails to deduct at
the prescribed rate, they will consider amending relevant PAYE Returns,
making the grower liable for any amounts of tax that have been
withheld. This is in accordance with Sections 89c and 168(1) of the
Tax Administration Act 1994.
