There are several significant changes proposed to New
Zealand's employment legislation. These changes are employee
focused and as a result increase employer obligations. This article
looks at what the main proposed changes are.
Contractors and the minimum wage
The proposed amendment to the Minimum Wage Act 1983 would extend
its cover to people engaged as contractors. Independent contractors
do not currently enjoy the protection afforded by the Minimum Wage
Act 1983, and thus, unlike employees, do not have to receive the
minimum wage for each hour worked. This will mean those engaging
contractors on a project basis will need to be careful that the
amount paid to the contractor for the services performed covers the
minimum wage for each hour worked by that contractor.
In addition to the increase in the paid parental leave
entitlements in April 2016, the Employment Standards Legislation
Bill (the ESL Bill) proposes to make further
changes to the current parental leave legislation. The ESL Bill
would make parental leave available to more workers, i.e. seasonal
workers, as well as making more people eligible for the scheme by
broadening the concept of primary caregivers. The ESL Bill would
also provide greater flexibility for how parental leave is taken,
and would introduce 'keeping-in-touch days' which would
allow employees to work a limited number of hours during their
parental leave without losing their parental leave
Zero hour contracts
The ESL Bill also addresses one of the most contentious issues
in the employment arena in 2015, zero hour contracts. Zero hour
contracts are employment relationships where the employee is not
guaranteed any hours of work, but is required to be available to
work, and is prevented from working for another employer. This type
of employment relationship is common in the fast food, supermarket
and residential care industries, and the concern is that these
types of agreements are seen to undermine the employment
relationship as the risk and cost of flexibility is borne by the
employee, with all of the benefit being enjoyed by the
The ESL Bill would prohibit zero hour contracts, and provide
strict requirements around hours of work and when shifts can be
cancelled. It would also require employment agreements to record
set hours of work where those hours have been agreed to at the
outset of employment.
We suggest any employer currently using zero hour contracts
contact us to discuss these changes.
In addition, the ESL Bill will prevent employers making
unreasonable deductions from employees wages. This issue attracted
media attention earlier in the year in relation to petrol station
attendants wages being docked where petrol was stolen during that
employee's shift. The proposed law would prevent employers from
making such deductions where they are unreasonable, for example
where the loss is caused by the action of a third party over which
the employee had no control.
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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