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A New Year, a New Approach to Your Business

Published December 12, 2016 (last updated June 30, 2023) - Ben Fairfax

As the new year quickly approaches, it is time for employers to reflect on what they can do to make it a good one. One way to do this is by being informed and prepared. Every year, Employsure sees employers consistently making the same common mistakes and this is why we have provided our consolidated guide to assist you with making 2017 the best year possible.

Time and wage records

Failure to record or keep accurate time and wage records is an extremely common mistake amongst employers, and has the potential to land you in very hot water. By maintaining up to date and accurate records you are able to ensure that your employees’ pay and leave are correct. Employees should have access to this information if required.

As an employer, you are required under the Employment Relations Act 2000, and the Holidays Act 2003 to keep accurate wage, time and leave records. In particular, employers must be able to prove that their employees have received all of their minimum entitlements such as the applicable minimum wage and their annual holidays.

If an employer fails to maintain accurate wage, time, holiday and leave records as required under the relevant Acts mentioned above, they could potentially face a hefty penalty. This may be up to $10,000 for an individual or up to $20,000 for corporations and companies. Penalties may also be stacked. The Court may apply further pecuniary orders which may be up to $50,000 per individual or up the greater of $100,000 or three times the amount of financial gain for a body corporate. An infringement notice may also be issued for the breach in record keeping requirements.

Employees’ minimum rights

All employees regardless of whether they are employed on a full-time, part-time, permanent, fixed-term or casual basis are entitled to the minimum rights and responsibilities set out in the law. These apply even if they are not included in an employment agreement.

Every employee is entitled to the following minimum rights:

  • four weeks’ paid annual holiday leave per year
  • 11 public holidays per year off work on pay, if they are days when the employee would normally work
  • pay and a half if an employee works a public holiday
  • five days’ sick leave per year
  • to always be acted towards in good faith by their employer
  • a healthy and safe workplace
  • no unlawful deduction of money from wages
  • to be paid no less than the minimum wage

All employees are entitled to a copy of their individual or collective employment agreement in writing. This employment agreement cannot include any terms or agreements which are less than the minimum rights stipulated in the law.

Employers must ensure they provide all their employees with the minimum rights, and in no way try to alter their employment agreements to disadvantage an employee.

Minimum rate of pay

Some employers do not intentionally fail to pay their staff correctly, but keeping up to date with the latest minimum rates of pay applicable to each employee can be difficult, especially as there are three types of minimum wages.

All employees who are full-time, part-time, fixed-term, casual or work from home are paid a wage are all entitled to the minimum wage rates.

Adult minimum wage

This wage applies to all employees who are over 16 years of age, who are not starting out workers or trainees. This wage also applies to all employees involved in supervising or training of other employees. This wage is the most widely used minimum wage across New Zealand businesses.

Starting-out wage

This wage applies to workers who are entering the workforce for the first time. These workers are generally:

  • 16 and 17 year olds who have not worked for a continuous six months with one employer
  • 18 and 19 year old who have not received social benefit pay for at least six months, or who have not worked a continuous six months with one employer before receiving a benefit
  • 16 to 19 year olds who are required under an employment agreement to undertake industry training

If an employee is supervising or training other workers, then the starting-out minimum wage doesn’t apply and they must be paid at least the adult minimum wage.

Training wage

The national training wage is for employees who are over 20 years of age, and who are completing industry training.

A fair procedure

Often where employers go wrong is that they failure to follow a correct and fair procedure when dealing with an employee’s misconduct. Ensuring that a fair process (or procedure fairness) is followed in regards to misconduct is just as important as there being a valid reason for taking action against an employee.

If an employer has a policy and procedure for how disciplinary issues, warning or dismissals should be approached included in their employment agreements then they have a contractual and good faith obligation to ensure they follow this.

The Employment Relations Act details the requirements an employer must adhere to before taking action against an employee. These requirements include:

  • fully investigating any and all concerns
  • clear and open communication with the employee, including informing them of exactly what is being investigated, providing all relevant supporting material and letting them know that disciplinary action may result from the investigation
  • allowing the employee the chance to respond and share their side of the story
  • taking the employee’s explanations seriously
  • ensuring the decision maker is impartial
  • if a disciplinary meeting takes place, informing the employee of their right to bring a representative or support person
  • not treating the employee any different whilst an investigation takes place

Where employers tend to go wrong is even though there may be a valid reason for taking action against an employee, they have not followed a correct procedure. Some common mistakes include:

  • failure to interview all relevant people (staff, witnesses, others involved)
  • waiting too long before beginning an investigation
  • not communicating to the employee that an investigation is taking place, or not informing them of the possible outcomes of the investigation
  • not allowing the employee the chance to respond to allegations and not genuinely considering their explanation
  • failing to consult with all parties involved

If you have any questions relating to keeping accurate records, your employee’s minimum entitlements or how to follow a fair procedure, Employsure is here to help. As a leading workplace relations specialist we can provide advice on any area of employment relations or health and safety that is causing you confusion, so call us today on 0800 568 012.

About Employsure

Employsure is one of New Zealand’s largest workplace relations advisers to small and medium businesses, with over 5,000 clients. We take the complexity out of workplace legislation to help small business employers protect their business and their people.

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