Tanya Gray | ConsultingHQ

Accredited employer must haves – Training of New Zealanders

by Tanya Gray | Apr 4, 2022 | Accreditation

AEWV Accreditation Requires Commitment to Training & Developing New Zealanders

Contents

Skill shortages are at a critical point in New Zealand, so what do you have to do to finally recruit skilled workers from overseas?
Extended border closure has resulted in skilled workers already in NZ being in very hot demand – in what has become a cut-throat market
Training & Development has become a very important part of the 2022 accreditation process
What evidence of training is required?

Skill shortages are at a critical point in New Zealand, so what do you have to do to finally recruit skilled workers from overseas?

Extended border closure has resulted in skilled workers already in NZ being in very hot demand – in what has become a cut-throat market

With the borders being closed for over two years now, the war for talent is more competitive than ever before. Skilled and experienced workers are being shoulder tapped and headhunted throughout New Zealand.

Skilled employee retention is a challenge especially when recruitment is increasingly difficult, and the border still closed for a few months to come.

Training and development of the skills for the New Zealand workforce is seen as the best long-term solution to the skills shortages we are facing

Training & Development has become a very important part of the 2022 accreditation process

In your accreditation application, you must demonstrate that you are committed to the training and development of New Zealanders, or skills obtained in the local market – and that you will not be dependent on skilled migrant workers alone.
This could include showing that you have enrolled your non work visa employees in specific industry training programs, apprenticeships or have been running training and upskilling within your own business internal development programs, using reputable and recognised training providers.

What evidence of training is required?

Information showing the breakdown of your existing workforce by citizenship/residency status.
Invoices for any training programs provided by an external training organization.
Evidence of certifications from participating in training.
The attendance record and the overview or summary of any internal training programs run within your business.

Accreditation applications open on 23 May 2022. If you do not yet have training & development plans in place for your employees, you will need to consider creating a training plan and showing demonstratable evidence of your future commitment to invest in developing the employees you have.

Examples of suitable training regimens would be industry certification courses or apprenticeships.

Out team can help with this – and with any aspect of accreditation. This is an area of specific interest for ConsultingHQ. Our other businesses, RecruitNZ and VisaAide can assist with other aspects of Employer Accreditation and application for AEWV once you are accredited, while RecruitNZ has a dedicated, focused team working in the area of international skilled worker recruitment.

Contact us to find out how we can help your business.

Workplace policies for AEWV 2022

by Tanya Gray | Apr 1, 2022 | Accreditation

Workplace wellness for Employer Accreditation

Contents

The AEWV which is a new temporary visa that replaces 6 previous work visas with a streamlined single visa process enabling NZ employers to employ skilled migrants
The AEWV work visa can help set migrants on the pathway to New Zealand residence by allowing them to work in New Zealand
Provide Evidence your business has good HR and workplace policies and processes
What are HR processes?
Employment New Zealand defines good faith as including the following three elements:
Good faith means dealing with each other honestly, openly, and without misleading each other. It requires parties to be active and constructive in establishing and maintaining a productive relationship in which they are responsive and communicative
What proof does an employer need to prove they manage their employees in good faith?
Payroll systems and keeping records
Workplace policies and processes
Cultural Diversity policy and practices
Managing non-compliance (and maintaining compliance)

The AEWV which is a new temporary visa that replaces 6 previous work visas with a streamlined single visa process enabling NZ employers to employ skilled migrants

Companies must be accredited under the new Immigration NZ policy to employ migrants on the new visa including companies that were accredited under the previous system (they need to reapply for accreditation and meet the requirements of the new policy when they want to hire more migrants).

The AEWV work visa can help set migrants on the pathway to New Zealand residence by allowing them to work in New Zealand

This has the potential to provide accredited employers with advantages over employers who are not accredited in terms of being able to source and hire skilled migrants.

Provide Evidence your business has good HR and workplace policies and processes

For Immigration New Zealand to approve your company as an Accredited Employer so that you can hire migrant employees on the new AEWV you will need to be able to provide evidence that your company treats its employees in good faith, pays people correctly, has good HR and workplace policies and processes in place.

What are HR processes?

HR processes can be described as the methods an employer uses to deal with its employees – you might describe it as the culture of the business. Details in policies and procedures cover many areas, for example, how sick and annual leave is managed, and others are supported by systems and processes such as payroll management.

With the many changes that have been made to employment legislation over the last few years, it is important that your HR processes are current and could stand up to external scrutiny. Immigration New Zealand will expect to see evidence that the employer meets the standards expected of a ‘good employer’ which is where the concept of dealing with employees in good faith comes in.

Employment New Zealand defines good faith as including the following three elements:

Parties must not act in a misleading or deceptive way.
Parties must be responsive and communicative.
Before making a decision, which may result in employees losing their job, the employer must give the affected employees sufficient information to be able to understand the proposal and then give them a proper opportunity to comment.

In fact, good faith is much bigger than this. It is more than just following the letter of the law and also requires employer to act in ‘the spirit of the law’. Employers are expected to treat others fairly using common sense. Broadly, good faith requires employers, employees and unions to:

act honestly, openly, and without hidden motives.
raise issues in a fair and timely way.
work constructively and positively together.
give each other relevant information ahead of when it is needed and as soon as possible, all information given should be carefully considered.
be fully honest with each other.
raise concerns or issues as soon as possible and respond to these quickly.
keep an open mind, listen to each other and be prepared to change opinion about a particular situation or behaviour.
treat each other with respect.

Often a company’s HR processes do not come under close external scrutiny until there is a dispute that has gone to mediation or, in extreme cases, to the Employment Relations Authority. The outcome often comes down to the question of “did the employer act in good faith towards the employee”.

Good faith means dealing with each other honestly, openly, and without misleading each other. It requires parties to be active and constructive in establishing and maintaining a productive relationship in which they are responsive and communicative

It is crucially important for an employer to have good, documented processes in place for HR processes such as performance management, disciplinary action, restructuring and redundancy and dismissal through long term illness. These are just a few examples where having robust HR processes can support an employer to ensure their actions meet the good faith test and employers, may be asked to show evidence of that behaviour by Immigration New Zealand.

What proof does an employer need to prove they manage their employees in good faith?

The type of evidence a company could provide to prove it acts in good faith with its employees could include the following:

Details of disciplinary processes, meetings and outcomes
Performance management processes
Consultation and communication during a restructure
Dealing with a harassment or bullying complaint
Any consultation processes that may have been undertaken e.g., the introduction of a new HR policy or procedure

An example of where an employer hasn’t acted in good faith is where they have incorrectly undertaken a restructuring and redundancy process to end a poor performing employee’s employment, when in fact a disciplinary process should have been carried out. Immigration New Zealand and the Labour Inspectorate would definitely not approve of that type of conduct from an employer and it could have a negative effect on any accreditation application.

Payroll systems and keeping records

Payroll is another HR (or finance) process where accuracy and compliance is essential. All employers, regardless of their size, must operate and maintain good payroll and record keeping system. Immigration New Zealand may look at the employer’s compliance in this regard by checking the following:

Timekeeping and recording
Minimum wage compliance
Holiday (annual leave) pay, public holiday pay, sick leave and payroll calculations
Payslip delivery
Correct treatment of KiwiSaver and associated payments to third parties e.g., IRD
Termination pay compliance

Employers should be aware that non-compliance can lead to prosecutions, fines, and stand-down periods during which INZ would not issue any visas.

Workplace policies and processes

From our previous experiences of assisting clients with their applications for accreditation we have discovered that Immigration New Zealand requires evidence from the applying company to prove they can demonstrate that they have a genuine and serious commitment to three important processes:

Implementing diversity policy and practices;
Knowing about and dealing with any non-compliance (internal checks and balances, and reporting); and
Implementing an immigration policy and keeping compliant with immigration and employment legislation.

Cultural Diversity policy and practices

Diversity has some key areas where it is important to be able to show the company is serious about it and prove that it proactively manages it. These include:

Gender pay and employment opportunities. An employer must be able to show that gender has no effect on pay differences, training and development opportunities, or opportunities to gain work experience. Also significant could be things such as lack of availability of facilities for female employees with breastfeeding responsibilities.
Migrant/local employee differences. These can be as obvious as pay differences but can also extend to work allocation and levels of responsibility. For example, if a migrant employee has the same qualifications, job title and experience, but is restricted to more menial work, smaller teams or less client-focussed roles, this would be clear (but less obvious) discrimination. Discrimination in this area can also include availability of facilities, such as refusing to accommodate fundamental dietary differences in rest room areas, lack of accommodation for religious needs, and might even include a failure to provide important information (e.g., health and safety information) in a non-English speaking employee’s native language.

Positively showing, or confirming, proactive compliance with these workplace processes and similar areas are most likely to be viewed favourably by Immigration New Zealand.

Managing non-compliance (and maintaining compliance)

Generally, public knowledge of non-compliance only comes about when an audit has been undertaken by the Labour Inspectorate and the results are so extreme that they publish the outcomes on their website as a warning to others. However, we know there are a number of employers who have a history of non-compliance but who don’t care that their conditions of employment are not satisfactory and will take the chance that they never get caught.

And then there are those who unknowingly make a mistake but due to having good checks and balances they can easily deal with the non-compliance.

The kinds of checks and balances that show a commitment to finding non-compliance are similar to those that help to ensure ongoing compliance, such as audits. These should be captured in a series of regular reports that show that the employer cares and follows up on its own compliance.

These include:

Testing payroll calculations regularly to ensure:

Holiday and absence pay are both correct;
Minimum pay rates are complied with (e.g. a person earning a full-time salary of $37,000 per year, but working extra hours for no pay, can easily end up earning LESS than $17.70 per hour when their annual salary is divided by the number of hours they actually worked); and
Termination pay is paid correctly, include all outstanding entitlements and that all deductions are properly authorised.

Auditing employee files to:

Ensure employment contracts exist for all employees (some employers have long-serving employees where there is literally nothing in writing from “back in the day”); and
Changes to employment benefits and conditions are recorded.

Auditing visas to ensure:

Employees are working within their visa conditions (it’s easy for a local manager, for example, to innocently transfer a foreign employee from Auckland to Hamilton to help out on a project when it could actually breach visa conditions);
No visas have expired; and
Employees on visas haven’t been promoted into jobs their visa doesn’t cover.

Auditing health and safety records to check:

Consistency of regular meetings and minutes (documented);
Health and safety training;
PPE safety checks; and
Reports, statistics and investigations.

The requirement to prove compliance also includes policies and procedures that give Immigration New Zealand confidence that the business is set up to remain compliant with at least the minimum requirements of New Zealand employment law.

And it doesn’t end there: employers with Union membership must be aware that Immigration New Zealand will also obtain feedback on all of the above from Unions and employee representatives.

Contact us to find out how we can help your business.

Minimum wage change 2022

by Tanya Gray | Mar 3, 2022 | ConsultingHQ Blog, Leave & Payroll

Minimum wage change 2022

Contents

The new minimum wage rates (before tax) from 1 April 2022:
General pay requirements

The NZ Government has announced an increase of about 5.9% to the minimum wage from the current $20.00 per hour to $21.20 per hour. The new rates come into effect on 1 April 2022.

The minimum wage applies to all paid employees aged 16 and older (including migrant workers), although there are different rates if your employee is 16 or 17 and is new to the workforce or if they are completing training. It doesn’t matter if they work full-time, part-time or casually and it also applies if they are paid an hourly rate, a salary, a commission basis, or some sort of piece rate.

For salaried employees, you need to make sure that their total remuneration meets minimum wage requirements for each individual pay period. You need to take into account any overtime, meetings, or other time spent doing work related tasks. It is important that these activities do not bring the employee’s total remuneration below the minimum wage rate.

There is no legal minimum rate for employees aged 15 years or younger.

The new minimum wage rates (before tax) from 1 April 2022:

Type of minimum wage from 1 April 2022	Per hour	8-hour day	40-hour week	80-hour fortnight
Adult	$21.20	$169.60	$848.00	$1,696.00
Starting-out	$16.96	$135.68	$678.40	$1,356.80
Training	$16.96	$135.68	$678.40	$1,356.80

When there is a wage rate change (or any change to an employee’s terms and conditions of employment) you need to advise the employee of this, and record the change in writing e.g., a variation of employment letter that is signed by both the employer and the employee. As with all employment documentation, you need to keep a signed copy of the change in your records and the employee also gets a copy. It’s important to keep these records for at least six years because they may be required if you are audited by the Labour Inspectors.

General pay requirements

New Zealand’s employment law requires you to:

Pay at least the minimum wage
Legally pay employees in cash, unless you’ve agreed another method in writing, e.g., their employment agreement
Pay employees as frequently as agreed in their employment agreement
Get their consent in writing to change the day or frequency they get paid
Pay annual holiday leave to staff before they go on leave, unless otherwise agreed in writing, e.g., in their employment agreement
Keep accurate records of all payments for at least six years.

If you have any queries at all about the payment of wages or other employment related matter please do not hesitate to contact ConsultingHQ.

Contact us to find out how we can help your business.

Calculating holiday pay

by Tanya Gray | Feb 9, 2022 | ConsultingHQ Blog, Leave & Payroll

The difference between standard pay & holiday pay

Contents

Standard pay
Entitlements to holidays and leave payments
Payment for annual holidays taken
Annual Leave Cash up
Wage Overpayment
Maintain accurate pay and annual leave records

Calculation of what you need to pay your employees at times during the employment life cycle can be complicated, but with the right HR Management systems and processes in place, including access to professional advice, it can be straight forward.

Paying employees correctly for their work is important and they are entitled to know how much they will be paid, how often, and how they will be paid, for example, direct credited into their bank account.

Usually, this sort of information is set out in an employee’s employment agreement or in the company’s employee handbook.

Standard pay

The Wages Protection Act 1983 covers how wages must be paid and prevents unlawful or unreasonable deductions from wages.

Employers must pay at least the minimum wage to all employees. There are three minimum wage rates, these are:

1) the adult minimum wage;
2) starting-out workers (they must be paid at least the minimum starting-out wage) and;
3) trainees over 20 years of age (they must be paid at least the minimum training wage).

Further details on the different types of minimum wages and rates can be found on the Employment New Zealand website.

Entitlements to holidays and leave payments

All employees are entitled to at least four weeks’ paid annual holidays (or ‘annual leave’) each year.
All employees are entitled to paid leave on public holidays, when the public holiday falls on a day that would otherwise be a working day for the employee. Where an employee works on a public holiday that work should be paid at the rate of time and a half (at least).
After six months continuous employment or meeting the ‘hours worked test’, employers must support their employees with sick leave, bereavement leave and family violence leave when required

Payment for annual holidays taken

Payment for annual holidays that employees are entitled to must be made at the rate of the greater of the employee’s ordinary weekly pay at the time the holiday is taken or the employee’s average weekly earnings over the 12-month period just before the annual holiday is taken. These calculations apply to all employees, including those whose pay has varied over the year or whose work pattern has changed during the year. For further information on calculating holiday pay rates you can visit the Employment New Zealand website.

Annual Leave Cash up

Annual holidays can’t be cashed-up unless the employee asks in writing and has completed 12 months employment. Employees may request to cash-up less than a week at a time and can make more than one request until a maximum of one week of the employee’s minimum annual holidays is paid out in each entitlement year.
If an employer agrees to pay out some of the employee’s annual holidays, they need to pay as soon as they can, usually the next pay day (and keep a record of the date and amount paid). The payment must be at least the same amount as if the employee had taken the holidays.

Wage Overpayment

Overpayments can occur due to a misunderstanding of an employment agreement, a clerical error, or technical fault in the payroll system. Regardless of the cause, employers must be careful when trying to recover an overpayment and know that success is not always guaranteed.

Maintain accurate pay and annual leave records

Employers must keep accurate wages and time, and holiday and leave records for all employees. Employee records must be made available to employees, their union and Labour Inspectors if they ask for them. They must be in written form or be easy to access and convert to written from and must be kept for six years.

Contact us to find out how we can help your business.

Making deductions from wages

by Tanya Gray | Jan 4, 2022 | ConsultingHQ Blog, Leave & Payroll, Legal Compliance

Making deductions from a employee wages

Contents

Wages Protection Act 1983
What will suffice for a deduction to be ‘agreed in writing’
When an employee leaves without giving their contractually agreed notice period
What are overpayments in limited circumstances
Payroll overpayments
Process to follow for wage deductions

There are situations where an employer feels justified in making a deduction from an employee’s pay.

For example: the employee may have resigned from their job without giving their required notice – and owes the company money (perhaps they undertook company sponsored education or training and agreed to stay for a period of time after completion or reimburse the company for the costs involved if they left); they may have damaged company property or equipment; or received a speeding ticket in a company vehicle.

It doesn’t matter how justified the employer feels in making the deduction, if an employer deducts money from an employee’s pay without their written consent (freely given, i.e., the employer can’t threaten or pressure the employee to agree), the employee could take legal action to get the money back (for a period of up to 6 years after the deduction occurred).

Employment law stipulates that deductions may only be made from an employee’s wages if they are required by law, agreed to by the employee.

In certain limited circumstances, overpayments are able to be deducted, but this requires advice from an HR or employment legal advisor.

This article covers when you can and can’t make deductions from wages or pay, and the process you should follow.

Wages Protection Act 1983

The Wages Protection Act 1983 sets out the way wages must be paid and prevents unlawful deductions from wages.

Employers can lawfully make a deduction from pay if:

The deduction is specifically required by law, for example, PAYE tax, student loan repayment, child support. For this type of deduction, the employer is paying something on the employee’s behalf, so the employee doesn’t have to agree and can’t ask you to stop;
the deduction is for a lawful purpose, is reasonable and the employee has agreed to or asked for the deduction in writing;
the deduction is to recover an overpayment in limited circumstances; and
a court directs that a deduction be made.

What will suffice for a deduction to be ‘agreed in writing’

Often employers believe that if they have a general deductions clause in the employment agreement, this will cover the ‘agreed in writing’ requirement for them to make a deduction from an employee’s pay. However, this is not correct, an employer must consult with the employee before they make a specific deduction under a general deductions clause. The employee can vary or withdraw their written consent to a deduction by giving notice in writing at any time. The employer must then vary or stop the deductions within two weeks of receiving the notice or as soon as practicable.

When an employee leaves without giving their contractually agreed notice period

If an employee leaves their job and doesn’t give their employer the notice required in their employment agreement, an employer can’t make deductions or withhold their wages or holiday pay unless the employee has given their written consent. A written employment agreement may include a specific deductions clause giving the employer specific permission to deduct wages or holiday pay if an employee resigns without giving the required notice. This clause may be enforceable if:

the employee has been given adequate opportunity to consider and ask for independent advice on the terms and conditions of the employment agreement; and
the employee has signed the employment agreement; and
any deductions from wages or holiday pay relying on that clause considers the actual loss suffered by the employer as a result of the employee failing to work their notice period; and the proportion of the notice period that the employee fails to work.

Although this is extremely irritating, it is illegal to make an arbitrary deduction from an employee’s pay for an early departure from the business. Making a deduction from wages for time unworked is called a “penalty clause,” and the Employment Relations Authority (ERA) has ruled several times that they are in breach of the law.

What are overpayments in limited circumstances

In limited circumstances, the employer can recover an overpayment for any period that an employer doesn’t have to pay wages because during that period the employee has:

been absent from work without that employer’s authority;
been on strike;
been locked out (within the meaning of that subsection); and
been suspended.

These are the only circumstances in which an employer can recover overpayment of wages as of right, without requiring the employee’s written consent, and only if it wasn’t practical for the employer to avoid the overpayment (due to the methods and equipment used to make payments).

The employer must give the employee notice of the overpayment that they will be recovering:

no later than 10 days after the employee’s next normal pay day if they don’t have a fixed workplace (fixed workplace means they work in one set workplace); or

if they have a fixed workplace, but don’t go there during normal working hours, then no later than the first day after the employee’s next normal pay day that they go to their workplace during normal working hours; or

if the worker has two or more fixed workplaces and didn’t go to either of them during normal working hours on the employee’s next normal pay day, then no later than the first day the worker goes to one of the workplaces; or

no later than the employee’s next normal pay day in any other case (legally it must be recovered within two months of letting the employee know).

Payroll overpayments

Where there has been a payroll error and the business has overpaid wages, it may make sense to deduct the overpayment from the employee’s next pay. However, this is not lawful, and while it was a genuine mistake, you cannot make this deduction without the employee’s consent.

If you do find that you have made an overpayment, we recommend requesting that employee pay back the money, or propose deducting it from their next pay (or over a series of pay periods).

Process to follow for wage deductions

As in most employment situations, the most crucial step for an employer to take is to consult with the employee before taking any action.

The employer should advise the employee in writing of the proposed deduction, the reason for it e.g., for a speeding fine in a company vehicle, how much and when you are proposing to take it from their pay. You must then seek their feedback and genuinely consider their response in making your final decision e.g. an employee may ask if it could be deducted in installments rather than a lump sum.

As discussed, an employee has to agree to the employer making a deduction from their pay in writing. However, if an employee refuses to reimburse the company for any monies legitimately owed, the employer may have an option to explore disciplinary procedures for failing to engage in good faith.

Making deductions from pay can be tricky, and there are other situations relating to making deductions that aren’t covered in this article. It is important that you get pay related matters right, so if you have any queries about making deductions from pay, please seek professional advice from ConsultingHQ before taking any action.