For many New Zealand businesses, the lights never go out. From bustling hospitals and emergency services to late-night convenience stores and early-bird bakeries, shift work forms the backbone of countless industries. But keeping your doors open 24/7 comes with unique challenges, particularly regarding fair compensation and legal compliance for shift workers and those employees on-call.
This guide unpacks the complexities of shift work in New Zealand, equipping you with the knowledge to confidently navigate on-call allowances, shift penalties, and legal requirements.
What is shiftwork?
In New Zealand, shift work is usually characterised by variable working hours outside standard business hours (e.g., 9 am-5 pm). It often involves rotating rosters, nights, weekends or public holidays.
Examples of shift work
Many New Zealand businesses rely on shift workers to keep things running seamlessly 24 hours a day, seven days a week. Shifts may be arranged in a number of ways, including:
Early morning shift: Starting before 7:00am.
Late night: Finishing after 10:00pm.
Night shift: Working primarily through the night (e.g., 10:00pm - 6:00am).
Rotating roster: Cycles through different start and finish times.
Weekend shift: Working Saturdays and Sundays.
On-call: Available outside scheduled shifts for emergencies or short-notice tasks.
These schedules may be fixed (the employee is expected to work the same schedule each week) or variable (the employee is expected to work a rotating schedule of different shifts at different times of the day). They may also be required to be available to work on request at any time of day (on-call).
The nature of the schedule – and what an agreement or contract deems as standard hours – may affect the type of penalties an employee receives.
What are shift workers?
According to the Holidays Act 2003, a ‘shift worker’ is defined as, ‘an employee who is employed to work regularly at different times on different days.’ This definition focuses on the variable nature of a shift worker's schedule compared to standard business hours.
Shift workers come from diverse professions, including:
Healthcare professionals: Nurses, doctors, and hospital staff.
Emergency services: Police officers, firefighters, and ambulance personnel.
Retail workers: Supermarket staff, convenience store employees and petrol station attendants.
Transport workers: Bus drivers, taxi drivers and airline staff.
Hospitality staff: Chefs, bartenders, and hotel receptionists.
Manufacturing and production workers: Factory workers and assembly line operators.
What are shift penal rates?
In New Zealand, penal rates are considered a form overtime pay. These rates are higher than employees’ ordinary hourly rates and are designed to compensate them for the disruption and inconvenience of working outside standard business hours.
Are employers required to pay shift penal rates in New Zealand?
While not required by law (except for public holiday penal rates), shift penal rates are commonly included in employment contracts and negotiated between unions and employers in collective agreements.
Night shift rates
Night shift work can be physically and mentally demanding due to disrupted sleep patterns and circadian rhythms. To compensate for these challenges, New Zealand businesses may pay higher night shift allowance rates. In some industries, this is mandated in collective agreements. The night shift penal rate an employer pays depends on the employment agreement in place.
On-call rates
Being on-call means being available to work outside your scheduled hours for emergencies or short-notice tasks. While not actively working, you're essentially ‘on standby,’ ready to respond when needed. On-call allowances compensate for this disruption and potential loss of personal time.
In New Zealand, employers must pay ‘reasonable compensation’ to employees for being on-call. Many industries have collective agreements in place to ensure employees are paid fairly and transparently for the time they are on-call, including sleepover wages, as well as any work they do if they are called out.
If you call an employee out to work, legally, you must pay them at least the hourly minimum wage. Some employers will pay the usual hourly wage, while others will pay extra.
When calculating a fair on-call rate for your employees, consider:
How many hours you expect the employee to be available (the longer the period, the higher the rate should be).
How this varies from their usual working hours.
Their usual hourly rate, wage, or salary.
How being on-call could restrict their activities.
Be clear about how an employee will be compensated for being on-call, which could be a flat fee for a set period of time, plus an hourly rate for call-outs (plus any applicable penal rates for public holidays, nights or weekends). You could also consider allowances like a paid day off in return for being on-call.
Shift penal rates vs. standard penal rates in New Zealand
While the term ‘penal rate’ carries the same basic meaning in both scenarios — additional compensation for inconvenient work hours — there are key distinctions between shift penal rates and standard penal rates in New Zealand. Let's break it down.
Standard penal rates
Apply to specific days and times outside of standard business hours (e.g., weekends, public holidays, and nights).
Aim to compensate for the disruption to personal life and social activities associated with working these non-standard times.
Shift penal rates
Apply specifically to employees who work shifts as part of their regular work pattern.
Account for the disruption to sleep patterns and social life inherent with shift work.
Are often higher than standard penal rates due to the repetitive and ongoing nature of shift work.
Examples of where shift penal rates apply in New Zealand
Here are some real-life examples of situations where shift penal rates might apply:
1. Hospital nurse
A nurse works a regular night shift rotation from 10pm to 6am. In addition to their standard hourly rate, shift workers will receive a higher night shift allowance, which is typically more than the standard 10-20% night shift allowance due to the ongoing nature of their shift work.
2. Retail assistant
A supermarket employee works a rotating roster that includes weekend shifts (e.g., Friday nights and Sundays). They may receive the standard weekend penal rate (time and a half) for their weekend shifts, but their employment agreement might also include an additional weekend penalty rate for shift workers to acknowledge the disruption to their regular schedule.
3. Ambulance driver
An ambulance driver has an on-call roster, meaning they must be available outside their scheduled shifts to respond to emergencies. They'll receive the standard on-call allowance for being available, but their agreement might specify a higher on-call allowance for shift workers, considering the ongoing pressure and potential sleep disruption associated with their role.
4. Factory worker
A factory worker is part of a team that operates 24/7 production lines, requiring shift rotations. They'll likely receive night shift allowances and potentially an early morning allowance for shift workers if their shifts start before standard business hours.
Workplace health and safety for shift workers in New Zealand
Shift work presents unique health and safety challenges for employees due to disrupted sleep patterns and increased fatigue. As an employer in New Zealand, you have a legal and ethical responsibility to ensure the well-being of your shift workers, and this requires proactive measures beyond just fair financial compensation.
Regulations and responsibilities
The Health and Safety at Work Act 2015 (HSWA) establishes the fundamental duty of employers to ensure, as far as reasonably practicable, the health and safety of their workers, including those engaged in shift work. WorkSafe New Zealand is the government agency providing guidance and resources for managing workplace health and safety risks, including specific recommendations for shift work.
Key health and safety risks
Fatigue: The most significant risk associated with shift work, leading to increased injury incidents, reduced productivity, and health issues like cardiovascular disease and diabetes.
Mental health: Disrupted sleep and social isolation, especially for lone workers, can contribute to anxiety, depression, and other mental health challenges. Use this template to scale your organisation’s mental health policy.
Musculoskeletal disorders: Awkward postures, repetitive movements, and heavy lifting during non-standard hours can exacerbate musculoskeletal issues.
Employer responsibilities
These are some of the things you can do to ensure the safety and well-being of your shift workers. Our Health & Safety Checklist is a great place to start.
Conduct risk assessment: Identify potential health and safety risks specific to your shift work operations and the tasks involved.
Implement a fatigue management plan: This plan should outline strategies to minimise fatigue risks, such as rostering practices, fatigue awareness training and adequate rest breaks.
Promote healthy work practices: Encourage proper hydration, healthy eating habits, and access to natural light during shifts.
Provide support and resources: Offer confidential counselling services and access to health professionals trained in shift work challenges.
Regular consultation and communication: Actively engage with shift workers and their representatives to understand their concerns and tailor solutions accordingly.
Get expert advice on shift work and on-call allowances
Shift workers are an integral part of many New Zealand businesses. Establishing the right pay and conditions for your people ensures you comply with legal requirements and sets your business up for long-term success. Understanding shift rates, overtime and on-call rates can be confusing, but it doesn’t have to be. Our team of HR and WHS experts are here to help you. Get in touch to discuss your needs today.
Frequently Asked Questions
What’s the legal framework for shift work in New Zealand?
The legal rights of shift workers and the obligations of employers are outlined in the following legislation.
The Employment Relations Act 2000 (ERA) sets minimum wage and entitlements like sleepover wages and travel allowances for certain types of shift work, addresses minimum rest breaks, meal breaks and defines entitlements for shift workers working on public holidays.
The Health and Safety at Work Act 2015 places a primary duty on employers to ensure the health and safety of their workers. This includes managing fatigue risks associated with shift work, such as implementing appropriate roster patterns and providing adequate breaks.
How is annual leave accrued and compensated for shift workers?
In New Zealand, both shift workers and regular employees are entitled to the same basic amount of annual leave, which is four weeks per year if they work full-time. This applies to employees who have been with their employer for at least 12 months.
However, there are some key differences in how annual leave is accrued and compensated for shift workers compared to regular employees.
- Penal rates and overtime:
Shift workers often work outside of standard business hours, triggering penal rates for work on weekends, public holidays, and nights. These higher rates can sometimes indirectly translate to a higher effective value of their annual leave compared to regular employees.
Additionally, shift workers who exceed standard working hours are entitled to overtime pay, further impacting their overall compensation.
- Public holidays:
When working on a public holiday, shift workers are entitled to at least their relevant daily pay (or average daily pay) for their normal rostered shift.
If they would have otherwise worked on the public holiday, they are also entitled to an alternative holiday as a day off with pay. This can sometimes effectively extend their annual leave compared to employees who have public holidays off by default.
- Individual and collective agreements:
While there is no legal requirement for increased annual leave for shift workers, individual employment agreements can be negotiated to include additional benefits like higher base salaries or annual leave payments to compensate for the different work patterns. Some industries with collective agreements might have specific provisions outlining additional annual leave entitlements or compensation for shift workers based on their unique working conditions.
Do you get paid for being on-call in New Zealand?
If on-call circumstances constitute ‘work’, you are entitled to at least the minimum wage for the hours you are on-call. This definition of work usually depends on various factors, including the constraints placed on your time while you’re on-call. In some cases, legal requirements and collective agreements stipulate on-call rates and allowances, including sleepover wages.
