Are you ready for these employment legislation changes from 1 April 2019?

Employment Legislation NZ Intepeople

A number of employment legislation changes are coming into effect from 1 April 2019. Here’s what you need to be aware of:

Minimum Wage Increase

From 1 April, the minimum wage will increase by $1.20 per hour, up to $17.70. This aligns with Labour & NZ First’s Coalition Agreement commitment to increasing the minimum wage to $20 by 2021.

The training and starting-out minimum wage rates are to increase from $13.20 to $14.16 per hour.

This may mean you need to review your internal pay relativities if your lowest paid people ‘leapfrog’ over others.

Victims Protection Act

The Victims Protection Act will come into force from 1 April this year. It will provide 10 days of paid leave a year to victims of domestic violence or people caring for affected children.

The Act also gives affected employees the right to request a short-term flexible working arrangement.

Payday Filing becomes Compulsory

From 1 April, all NZ employers will be required to file their employment information within two working days of every payday. This replaces the employer monthly schedule (EMS), which currently needs to be filed either in myIR or through the post.

If your annual PAYE/ESCT (Employer Superannuation Contribution Tax) is more than $50,000, you’ll need to file electronically through payday compatible software or myIR.

If you haven’t already, you can switch to payday filing now. Visit this IRD information page for everything you need to know about shifting to payday filing, including webinars and guides.

Employment Relations Act Changes (from 6 May)

Some minor changes are in force now. Most (e.g. restriction on trial periods) come in on 6 May 2019.

  • The right to set rest and meal breaks will be restored
  • 90-day trial periods will be restricted to businesses with less than 20 employees
  • Employees in specified ‘vulnerable industries’ will be able to transfer on their current terms and conditions in their employment agreement if their work is restructured
  • The duty to conclude bargaining will be restored
  • The 30-day rule will be restored.
  • Pay rates will need to be included in collective agreements, along with an indication of how the rate of wages or salary payable may increase over the agreement’s term.
  • Employers will need to provide new employees with an approved ‘active choice form’ within the  first ten days of employment and return forms to the applicable union, unless the employee objects.
  • Employers will need to allow for reasonable paid time for union delegates to undertake their union activities.
  • Employees will need to pass on information about the role and function of unions to prospective employees.

For full details about each of these changes, visit Employment NZ’s website here.

Proposed KiwiSaver Changes

With the Taxation Bill currently set down for its second reading in parliament, the following three key changes are proposed to come to KiwiSaver later in 2019. This is what we think the changes will be – you don’t need to make any changes yet.

Additional Employee Contribution Rates

Kiwisaver will introduce additional employee contribution rates of 6% and 10%. In addition to the current rates of 3%, 4% and 8%, these additional contribution rates offer employees greater flexibility.

There are no changes to the employer contribution rate of 3%.

Savings Suspension

A ‘contributions holiday’ – which an employee who has been a member of Kiwisaver for at least 12 months can apply for to take a break from making KiwiSaver contributions from their pay – will be renamed to ‘savings suspension’.

The maximum length of the ‘savings suspension’ will be reduced from five years down to one year.

Over 65s can join a KiwiSaver scheme (from July 2019)

On the topic of KiwiSaver, it’s important to note this additional change set to come in from July.

Currently, those over the age of 65 cannot join KiwiSaver (although they can continue to contribute if they are already a member). From 1 April 2019, it will become possible for over-65’s to join a KiwiSaver scheme.

For this age group, there will be no five year minimum ‘lock in’ requirement, i.e. members who join after the age of 60 will be able to access their KiwiSaver money from the age of 65, even if they have been a member for less than five years.

Take some time before 1 April to make sure your employment agreements, policies and practices are up to date with these upcoming employment legislation changes. If you would like more information, or if you’re not sure what they will mean for your business, please contact our team.

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