New Zealand: Minimum wages for contractors and restrictions on zero hours contracts

Last Updated: 17 August 2015
Article by Brian Nathan

Last week in Parliament, two different pieces of employment-related legislation have been in the House.

Extension of a minimum wage to some contractors

The Minimum Wage (Contractor Remuneration) Amendment Bill passed its first reading, and has been referred to the select committee for consideration.

The purpose of this Bill is to extend the Minimum Wage Act 1983, to require certain contractors to be paid not less than a minimum rate, which would be an amount equivalent to the minimum wage. It would cover both individuals who are aged 16 years or older and companies which are one-person businesses, who provide the following services:

  • building and construction services;
  • cleaning services;
  • courier services;
  • food catering services;
  • fast-food delivery services;
  • newspaper or pamphlet delivery services to letterboxes;
  • personal home-care support to an individual in the individual's house;
  • public entertainment services as an actor, musician, or singer;
  • the manufacture of clothing, footwear, or textiles;
  • telemarketing services;
  • market research services;
  • licensed security guard services;
  • services in the forestry industry related to planting, pruning, or felling; and
  • truck-driving services delivering goods.

This Bill is a private member's bill, which means that it was introduced to Parliament by a Member who is not from the party in Government. As a Bill that is not sponsored by the Government, it can be harder to get the numbers to pass the Bill through Parliament. However, the fact that the Bill has got through the first step means that it could go the rest of the way.

A copy of the Bill is available here, and submissions on the Bill can be made until 24 September 2015.

Improvement of employment standards

The Government has introduced a new bill which says it is aimed at improving employment legislation in a number of areas. The Employment Standards Legislation Bill would made substantial amendments to various pieces of existing legislation.

Paid parental leave

This Bill proposes to broaden the eligibility of the parental leave scheme to better reflect current work and family arrangements, and provide more flexibility to increase choice for both employers and employees. Key changes would include:

  • extending parental leave payments to non-standard workers (such as casual, seasonal, and employees with more than one employer) and those who have recently changed jobs;
  • extending parental leave entitlements to a wider range of primary carers than biological or formal adoptive parents;
  • extending unpaid leave to workers who have been with their employer for more than six months (but less than 12) as a standard six month leave period (inclusive of the 18 weeks' paid leave period);
  • providing for greater flexibility in how that unpaid leave is taken; and
  • enabling "keeping-in-touch" days so employees can work limited hours during their paid leave period if they choose.

Zero hours contracts and wage deductions

The Bill also aims to deal with recent issues that have arisen in relation to "zero hours" contracts and unreasonable wage deductions.

The Bill will include a requirement that where the parties to an employment agreement commit to a set amount of hours, those agreed contracted hours are stated in the employment agreement. The Bill will also prohibit employers from:

  • requiring employees to be available for work beyond the specified contracted hours unless employees are able to refuse any work offered or the agreement provides compensation for that availability;
  • cancelling a shift without reasonable notice or compensation;
  • putting unreasonable restrictions on secondary employment; and
  • making unreasonable deductions from employees' wages, for example, when deductions are made from an employee's wages to compensate the employer for loss or damage caused by a third party over which the employee could not reasonably be expected to have control.

Enforcement of employment standards

The Bill also aims to increase the compliance of employers with their obligations. This will be done by:

  • providing for the Employment Court to award pecuniary penalties of up to $100,000 for a company or $50,000 for an individual for serious breaches;
  • extending accountability to persons other than the employer (such as a director or CEO of a company) who are knowingly and intentionally involved in breaches of employment standards;
  • enhancing the powers of labour inspectors to request information from employers and share information with other regulatory agencies; and
  • an infringement notice regime for breaches of an employer's obligations in relation to record keeping and individual employment agreements.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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