Minimum Wage Change 2022

Minimum Wage Change 2022

Minimum Wage Change

Minimum Wage Change 2022

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.

Book a complimentary 15 minute consultationnow with our Director, Tanya Gray.

Calculating Holiday Pay

Calculating Holiday Pay

Calculating Holiday Pay

The difference between standard pay & holiday pay

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. 1) the adult minimum wage;
  2. 2) starting-out workers (they must be paid at least the minimum starting-out wage) and;
  3. 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.

Book a complimentary 15 minute consultationnow with our Director, Tanya Gray.

Making Deductions from Wages

Making Deductions from Wages

Making deductions from a employee wages

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.

Book a complimentary 15 minute consultationnow with our Director, Tanya Gray.

Staff Surveys as a Business Tool

Staff Surveys as a Business Tool

Survey Questions For Employees

What questions should you ask in staff surveys?

When you think about employee surveys, what generally springs to mind are the employee satisfaction and engagement surveys which many organisations administer on a regular basis, the aim of which is to measure and understand how employees are feeling about the company and the work environment.

While the engagement survey is valuable because of its potential to make a significant impact on employee satisfaction and employee engagement if done correctly, there are many other types of employee surveys that employers can also use to gather vital feedback on important employment related topics.

Surveys can be tailored to address nearly any issue the organisation wants input on and, if handled well, the information can have a significant impact on the retention and productivity of your most important resource – your employees.

 

Outlined here are brief details of several different types of employee surveys covering most aspects of the employee lifecycle

 

Engagement or Satisfaction Surveys

The engagement survey is the most common type of employee survey. They are often kept anonymous so employees can be frank and honest with their answers. Handled well, employee engagement/satisfaction surveys can be great tools for improving morale within an organisation. In fact, it’s generally seen that companies that encourage or engage their employees to provide ideas and suggestions have higher employee retention rates and job satisfaction.

Pulse Surveys

Regular, short surveys are called pulse checks. They are a fast and more frequent survey system, that does away with complex questions and is intentionally designed to be undertaken more often than the commonly used employee engagement survey. Pulse check surveys can be held monthly or quarterly (even weekly) and provide employers with a quick insight into the health of a company, hence the name ‘pulse’.

Health and Wellbeing Surveys

In these challenging times many people are working from home, or due to their work type they are not able to work at all. Therefore, checking on the health and wellbeing of your employees is essential. We recommend using the short pulse survey for this, so that you can gather feedback on their current state of mental and physical wellbeing. Example questions could be: how would you rate your wellbeing after X weeks of remote working so far; to what extent are you planning and engaging in activities to support your mental and physical wellbeing; what is helping you to successfully work from home; what additional support can we provide to help you successfully work from home; and how else can we help you at this time.

Employee Onboarding Survey

Creating a good onboarding experience for new hires is not a ‘nice-to-have’ process, it is crucial. A good onboarding survey asks new employees for their feedback on what went well, and what could have been improved. Don’t underestimate the importance of new employees feeling happy that their decision to join your company was the right one. We recommend that you take a 2-step approach to the onboarding survey with the new employee being asked to participate in short pulse type surveys in weeks one and five. Questions in the first survey are focused on the recruitment experience, their decision to choose your organisation and their initial onboarding experience. By week five when they get their second survey, they have had time to settle in and the ‘honeymoon period’ is pretty much over. They are asked to provide their thoughts about their overall induction programme, training, systems and support.

Diversity and Inclusion Strategy Survey

Building a workplace culture that prioritises belonging and inclusion is the best way to attract diverse and talented people, create a sustainable workforce, and—most importantly—make employees feel supported. Surveying employees on how they view the topics of inclusion, fairness, equity, respect, and diversity within your organisation can provide the crucial information you need to ensure you are engaging all employees. You can do this through specific pulse surveys or by incorporating pointed relevant questions in your general engagement survey. Example questions could be: All people have an opportunity to succeed in this organisation; I feel like I belong here; Senior leadership is prepared to effectively manage a culturally diverse workforce; and the people I work with treat each other with respect

360 Review and Employee Peer Evaluation Survey

A 360-degree survey is a process that solicits feedback on employee performance from several different sources: from managers, from peers, from reports, and from a self-assessment.

Exit Survey

In today’s knowledge economy, skilled employees are the asset that drives organisational success. Therefore, companies must learn from them—why they stay, why they leave, and how the organisation needs to adapt and change. A well thought out exit interview survey process can provide valuable information from departing employees, who usually feel comfortable providing frank and honest insights, which will help to improve the overall employee experience in future.

 

A Word of Warning on Employee Surveys

  • Employee surveys with high frequency can become less effective, as people begin to get ‘survey fatigue’.
  • Surveys should not be more frequent than fortnightly at most.
  • Poor communication and no follow-up – by running frequent surveys e.g., Pulse surveys, employers are setting up expectations that ‘things will be done’. Therefore, because employees are putting in the effort to give their honest feedback, proper action must be taken after evaluating the feedback. If you do not do anything in response to what they say, they will be discouraged to providing their feedback in the future. Hence you need to ensure you have appropriate resources available to communicate with employees and act on their feedback (which is the expectation you are setting).

Tips for Creating Effective Staff Surveys

  • Select topics and questions you want to get feedback on e.g., areas that will add value and insight to your business. These questions can cover a variety of topics, such as motivations, happiness, feelings about management, recognition, workload, job role, etc.
    Develop a solid employee communication plan to run before, during and after the survey and ensure you stick to the plan.
  • Analyse the responses upon completion – look at areas that feedback has shown need to be improved, as well as reflecting on the positive areas.
  • Analyse trend data, showing how results in each key area is changing over time.
    In accordance with your communication plan, share the results with employees in a timely manner.
  • Act – this is the most important step! Develop an action plan that includes key dates and who the person is who is responsible for delivering each item.
  • Review and repeat – pulse surveys need to be repeated regularly whereas the more comprehensive engagement surveys should be run annually.

ConsultingHQ has the expertise and experience needed to assist you with your employee surveys. If you would like to explore the possibilities of how employee surveys could benefit your business, please get in touch with Tanya Gray, Director.

Book a complimentary 15 minute consultationnow with our Director, Tanya Gray.

HRIS HR Management – The Future of HR

HRIS HR Management – The Future of HR

What Is HRIS?

Electronic HR Process & Record Management

Two significant outcomes of the global pandemic for business owners are that

  • change to business processes is inevitable, as situations evolve. We must remain flexible in the ‘how’ – but not necessarily in the ‘what’
  • the definition of how and where work gets completed has been changed forever. A new paradigm of HR processes has arrived.

Consequently, changes demanded by a new way of working in a significantly altered new reality requires businesses to review and rethink how they manage various processes including HR functions and processes – an area that is ready and waiting for automation.

Human Resource is one of the last to take advantage of automated database-driven processes.

This is arguably one of the greatest time saving & risk reduction management tools available for business owners.

Just how well businesses are organised to use digital technologies is a fundamental source of competitive advantage and automating certain HR functions and processes can help to free up huge amounts of time, allowing managers to focus on more important value-adding priorities.

Key benefits of HRIS

Currently, many businesses still coordinate their HR functions and tasks through the use of spreadsheets and other time-consuming, data-heavy and manual processes.

However, in the current environment, the faithful old spreadsheet is no longer the best choice when it comes to workforce management. Spending time and resources managing error-prone spreadsheets and endless administration tasks means less time and resources can be devoted to more essential areas.

Which HR functions and processes can be automated?

  • HR administration – using valuable management time on minor tasks such as chasing people to return forms and then processing them adds no value to the process;
  • Employment relations – having the ability to produce fast and accurate attendance metrics when dealing with attendance issues assists managers ensure compliance;
  • Performance management – an online performance review system has the ability to improve employee productivity and engagement by facilitating continuous feedback. It enables employers to align individual and team goals with organisational strategies and streamlines the employee appraisal process by offering a range of pre-built goals and development objectives;
  • Policies and procedures – providing employee online access to these and allowing employers to update and add new ones as needed;
  • Remuneration and rewards management – managing the regular pay review processes in a timely and effective way with important information such as job evaluation data at hand;
  • Positive employee experience – being able to update their own personal details, seamlessly manage their leave and access information such as pay slips drastically improves the employee experience by having a sense of autonomy and of ownership over their personal information;
    Onboarding – consistent online onboarding processes ensures a well organised, faster induction process which can have a positive and lasting impact on new employees;
  • Learning and development – ensuring that people are trained, engaged, and productive is critical to business survival therefore having access to digital learning and development programmes are important. This includes training managers in how to lead remote teams, and retraining workers in essential new skills. With the current skills/people shortages, many companies are also looking at ways to upskill non-tech talent with technical skills as a way to fill knowledge gaps and create a more agile workforce.

HRIS Reduces HR Documentation Errors & Improves Compliance

The need to move toward electronic HR management is now greater than ever. Businesses that automate administrative and highly repetitive tasks can free up resources to focus on longer-term “macro” activities such as shaping organisational culture, building the workforce of the future, and addressing the needs of its people—particularly in critical areas such as diversity and inclusion.

Compliance-related concerns become significantly reduced, and along with that, risk of compliance-related grievances.

If you are looking at exploring the possibilities of how an HR system can benefit your business, ConsultingHQ can take you through our Employee Management System which has been designed for growing small and medium businesses. If you are interested in reducing time spent on HR administration and being able to manage your HR tasks more easily, please get in touch with Tanya Gray, ConsultingHQ Director.

Book a complimentary 15 minute consultationnow with our Director, Tanya Gray.

COVID-19 Vaccines and the Workplace

COVID-19 Vaccines and the Workplace

Global Overview of Workplace Vaccination

A sharp upsurge in infections due to the Delta variant and a slowdown in vaccinations have pushed governments around the world to make COVID-19 jabs mandatory for health workers and other high-risk groups.

A growing number of countries now require proof of vaccination, or a negative Covid test to enter hospitality business or large public events – in particular, many indoor events mandate evidence of vaccination.

New York City for example, will become the first major U.S. city to require, from mid-September, proof of vaccination for customers and staff to be at restaurants, gyms and other indoor businesses as the US enters a new phase of battling the Delta Covid variant.

Can I make vaccination mandatory for employees?

In New Zealand, getting the Covid-19 vaccine is voluntary for most people. However, anyone who works in a high-risk border or managed isolation and quarantine (MIQ) setting legally must be vaccinated.

In addition to this, businesses providing services to potentially high-risk areas having conducted proper health and safety risk assessments and concluded that the role/tasks should only be performed by a vaccinated worker may require vaccination.

This is because of the health & safety risk whilst performing the role and the potential consequences of that risk, and holds true in situations where the use of PPE or extended distancing between workers is not viable.

Not all essential service providers require mandatory vaccination

Be aware that just because an employer is providing services to essential workers, it does not automatically put the roles into the mandatory vaccination category i.e., a number of essential work activities do not present increased risk not manageable with PPE, etc.

This means that the focus is strictly on what is required to perform the role just as you would for any role e.g., a truck driver – which requires a specific licence.

WorkSafe has useful information and tools to assist with assessing the risk to ascertain if a specific role needs to be performed by a vaccinated worker.

Management of employee personal health records regarding vaccination

Vaccinated status or otherwise is personal information and the Privacy Act states that it should only be requested where necessary. It is not necessary if the work has not been assessed from a health and safety perspective.

If roles within your business meet the health and safety threshold, you can ask employees if they have been vaccinated but they do not have to tell you if they have, or why they chose not to.

The reality is that most employers do not have an environment that meets the very limited circumstances identified by the Government as justifying mandatory vaccination, and you could potentially be exposing your business to Privacy Act, discrimination, or disadvantage claims by insisting on having this information.

Importantly, you may not discriminate against employees who choose not to get the vaccination – there may be religious or medical reasons why a person cannot be vaccinated.

Can my main contractor or client mandate that my workers are vaccinated, wear face coverings and record their attendance?

Vaccinations

As outlined above, if a particular role meets the health and safety threshold in terms of it being high risk and that vaccination/mask-wearing is a genuine occupational requirement then yes, you can mandate this for your role. Clients to whom you contract with can pretty much put in place whatever rules they want to, and your business needs to establish ways of meeting their requirements.

Roles that might have a genuine occupational requirement for vaccination include:

  • Front line workers – border/MIQ staff, medical professionals, supermarket workers etc
  • Aged care facility workers – due to the high-risk level for aged care residents if they contract Covid-19.
  • People working with children who are below the vaccination age.

Other roles which could also be considered as having a genuine occupational requirement include:

  • Hospitality/café workers who have face to face contact with customers, but not necessarily in a high-risk environment such as at the airport.
  • Back of house roles (e.g. administration) who work in higher-risk companies, but not actually in the high-risk area themselves.
  • Customer-facing roles, particularly in high traffic areas such as shopping malls.
  • Construction sites where there are high numbers of personnel in a confined area.

Employers need to assess the risk assess each job and decide if mandatory vaccination can be justified due to occupational requirements.

Recording attendance

At Alert Levels 1 and 2, businesses are only required to display a NZ COVID Tracer QR code or have an alternative way people can record their visit, but it is recommended that all businesses implement steps to encourage people to record their visit.

At Alert Levels 3 and 4, most businesses that are open must have systems and processes in place to ensure, as far as is reasonably practicable, that everyone aged 12 years or older who enters their workplace records their visit. This means more than just displaying the QR code, as required at all alert levels. It requires the person in charge of the business or service to have systems and processes in place to ensure that people do check in.

Can I ask candidates whether they are vaccinated during a job interview?

Businesses can only ask candidates if they are vaccinated when this is justified by the requirements of the role. For example, if a business decides, following a COVID-19 exposure risk assessment, that certain work cannot be performed by an unvaccinated worker, it may be reasonable to ask about an applicant’s vaccination status. This information will need to be collected and handled according to the Privacy Act.

What can I do if my employee in a high-risk role refuses to be vaccinated or wear a mask?

If employees are doing work that can only be done by a vaccinated worker, but are not vaccinated, in the first instance employers will need to address any practical barriers to accessing vaccination (e.g., checking if travel or time off work is needed). There are a range of other options that employers concerned should think about before considering termination such as: changing work arrangements or duties, taking leave, and restructuring work. Obviously, employers should take care to be fair and reasonable in their response, and work through processes with employees in good faith before deciding on any outcome.

Fortunately, the acceptance and understanding within the New Zealand community that vaccination is a reasonable and responsible step we can all take to protect the health and Safety of ourselves, and others seems to be gathering momentum and increasing.

Summary of advice to employers around mandatory vaccination

  • Before requiring mandatory vaccinations of staff – assess the risk, it is likely that it can be solved via PPE/risk reduction measures. In fact, there are very few roles/industries where the risk is so great as to require mandatory vaccinations to keep employment. Therefore, dismissals resulting from lack of vaccinations is in the majority of cases not really an option.
  • Consulting and communicating with staff and ensuring the Privacy Act is maintained throughout the consultation.
  • Seeking feedback from staff about what you are considering – perhaps introducing a voluntary register to begin with.
  • If clients request mandatory vaccinations of your staff who attend their worksites – ask the client for further information so that you can understand their risk assessment which requires vaccination information as a condition of contracting services.

As this is a rapidly changing area, if you have any questions about vaccinations and employment or you just need some general HR guidance and expert advice, please give us a call, we would be very happy to assist you.

Book a complimentary 15 minute consultationnow with our Director, Tanya Gray.