Following the change in New Zealand's government in 2023, New Zealand's employment law experienced significant change. Whether you are an employee or employer, you need to be aware of these changes. This article provides a straightforward explanation of the key updates to New Zealand's employment law. Additionally, this article discusses how you, as an employer, should be aware of your obligations.
Minimum Wage
The minimum wage in New Zealand often changes. You, as an employer, must understand what your obligations are. From 1 April 2023, the minimum wage rate for employees aged 16 and over increased to $22.70 per hour. The minimum wage for new employees or trainees increased to $18.16 per hour.
These rates exclude the KiwiSaver Employer Contributions, which you should still pay your employees on top of their hourly rate. For your employees on a salary, you need to ensure their average hourly rate is more than the minimum wage. You also need to compensate them for any potential overtime they may need to complete.
Health and Safety Committees and Representatives
Important changes were made to the Health and Safety at Work Act (HSWA) around health and safety committees and representatives. The following changes took effect on 12 June 2023:
- If an employee seeks a health and safety representative, the company is obligated to commence an election.
- If a health and safety representative or five or more employees express the need for a health and safety committee, the company is required to establish one.
- Declining to appoint a health and safety representative or committee by claiming exemption from the ‘high-risk sector or industry' classification is no longer acceptable for small businesses.
Personal Grievances Due to Sexual Harassment
A personal grievance refers to a formal complaint or dispute raised by an employee against their employer. These grievances typically concern issues such as:
- unfair treatment;
- unjustified dismissal;
- discrimination;
- harassment; or
- breaches of employment agreements.
Previously, if you wished to raise a personal grievance, you had to do so within 90 days. However, since 12 June 2023, you have 12 months, commencing from the date of the act, to raise a personal grievance.
Notably, the extended timeframe starts from the day the sexual harassment occurred or came to the employee's notice. The later date of the two will be classified as the commencement day for the 12-month period.
Ultimately, the extended time frame allows your workers to:
- have more opportunities to seek justice without rushing the claims process; and
- process their experience before making a decision.
Importantly, you must raise all other non-sexual harassment-related personal grievances within 90 days. Other personal grievances you may experience include bullying, racial discrimination or unjustified dismissal. The 90-day period commences from whichever event occurred later:
- from the day the act occurred; or
- came to your notice.
90-Day Trial Periods Extended to All Employers
The 90-day trial period for new employees is an important period of time. During this period, you provide your new employee with training, and they demonstrate why they are suitable for their new role.
You can use the 90-day trial period in any industry and for any job, as long as:
- the employee has not worked for you in any capacity previously; and
- your employee agrees to the trial period in writing before they start working for you.
You may also opt for a shorter trial period if you wish to do so, but not longer. Other common trial periods are 30 or 60-day trials.
Since 23 December 2023, all employers can use a 90-day trial period. This assumes that you and your employee's employment situation meet all the other requirements for using a 90-day trial period. Prior to 23 December 2023, the 90-day trial period was only eligible to small business owners. This meant you had to have a business with 19 or fewer employees to use the 90-day trial period.
Migrant Exploitation
Migrant exploitation is a serious employment and immigration issue. The following changes came into effect on 6 January 2024.
1) Employment-Related Document Requests
When an Immigration Officer requests employment-related documentation, you, as an employer, must provide these documents within ten working days.
2) New Immigration Infringement Notices
New immigration infringement notices are in force. These notices penalise:
- you allowing someone to work for you when they are not allowed to under the Immigration Act;
- if you employ someone in a way that is inconsistent with the working conditions in their visa; or
- if you fail to supply the requested documents within ten working days to Immigration New Zealand.
3) Chief Executive of MBIE New Powers
The employment law updates allow the Chief Executive of MBIE to publish the names of employers who do not comply with the Immigration Act. This creates a strong incentive for you as an employer to comply with the Immigration Act.
Many of these changes do not change your existing obligations to your employees. However, these changes standardise the penalties if you do not comply with the Immigration Act.
Repeal of the Fair Pay Agreement
Fair Pay Agreements (FPAs) were sector-level arrangements that set minimum terms and standards for your workers in their relevant occupation types. FPAs usually covered occupations that were considered ‘vulnerable'. For example, FPAs covered workers such as cleaners and hospitality workers.
The Fair Pay Agreements Act was repealed on December 20, 2023. However, your responsibilities to your employees have not changed. Employees and unions may still negotiate with you to secure more favourable terms and conditions of employment.
Key Takeaways
New Zealand employment law has changed drastically over the course of 2023. As an employer in 2024, you must take a proactive approach to deal with these significant changes. Some of the key changes to New Zealand employment law include:
- adjustments to the minimum wage rates for staff;
- universal accessibility of the 90-day trial period; and
- extended timeframes to lodge personal grievances.
These changes are designed to promote your employees' health and safety in the workplace and combat migrant exploitation. Further, the repeal of FPAs underscores the importance of staying up to date with these changes in the law.
