Employment Law Changes

What is definitely going to happen?

1. The minimum wage will increase to $16.50 from April 2018

2. The 90 day trial period is coming to an end, it has been announced by the government. However, the good news for small business is that the abolition of this is only applicable to companies with 20 or more employees.

3. The National government relaxed the rules around rest and meal breaks in 2015. Watch out for Labour government to restore prescriptive rest and meal breaks in the near future. There will be limited exceptions for essential services but by and large, these changes will affect the way a lot of businesses operate.

What are the other proposed amendments?

1.Minimum Wage increases – the government plans to increase the minimum wage to $20 per hour by 1 April 2021. This is a 27% increase over 4 years. This will put pressure on employers to increase wages across the board. This will also have implications on kiwisaver as the contributions will still be a minimum or 3% of the gross wage.

2. Fair Pay Agreements – The government proposes industry and sector collective bargaining which could set wages across industries with industry wide collective agreements. All employers (big or small) would need to meet the minimum requirements of those agreements.
3. Pay Equity and Equal Pay Bill – the government is looking at comparing wages across equivalent industries and setting equal pay laws

4. Unions to be given more powers and government plans to improve union bargaining positions. This has already been started.

5. Contractors – Statutory support and legal rights for “dependant contractors”. So, contractors who “depend” on a position can be given the same rights as employees e.g. sick pay, statutory holidays etc.

6. Restore reinstatement as the primary remedy for employee dismissals – employer MUST get the process right in any employee dismissals.

7. Restore protections for vulnerable workers; e.g. cleaners – if a cleaning company inherits a new contract, they inherit the employee undertaking the work on that contract.

8. The government plans to investigate measures to improve job security for people in “precarious” forms of employment: e.g. labour hire/casual/seasonal/contracted and subcontracted.

9. Consultation on minimum redundancy protection (currently there is none)

10. Investigate options for ensuring people who work more than 40 hours per week to receive adequate remuneration.  

11. Increase number of Labour Inspectors from 55 to 110

12. Right to elect H&S representatives extended to all workplaces irrespective of size or industry

13. Domestic Violence Leave – a Bill introduced in 2017 which was defeated however supported by Labour would provide an extra 10 days per year of paid leave for victims of domestic abuse. Family violence to be classed as a workplace hazard.

Not all  of these things will come to be, but being informed of possible changes can help small businesses to plan ahead. It is a good idea now to look at your employment agreements to see if any changes will need to be made to them.