Employment Relations and Minimum Wage updates

Employment Relations and Minimum Wage updates

Changes in effect on 1 April 2019

Changes in effect on 1 April 2019

Minimum Wage

The minimum wage increases to:

  • $17.70 per hour for workers paid by the hour or by piece work
  • $141.60 per day for workers paid by the day
  • $708 per week for workers paid weekly, and
  • $1,416 a fortnight in all other cases
  • $17.70 per hour is payable for each hour worked over 8 per day, 40 per week and 80 per fortnight

The minimum starting-out rate (80% of the adult rate) for workers not involved in training or supervision who are aged 16, 17 and have not worked continuously for the employer for a period of 6 months, or aged 18 or 19 and have spent 6 months on a benefit and not previously worked 6 months for an employer - increases to:

  • $14.60 per hour
  • $113.28 per day
  • $556.40 per week and
  • $1,132.80 per fortnight in all other cases
  • 14.60 per hour is payable for each hour worked over 8 per day, 40 per week or 80 per fortnight.

The trainee rate (for those training for an occupation to which their employment agreement relates) is as for the starting-out rate.

Victims Protection Act

The Domestic Violence – Victims Protection Act amends:

The Employment Relations Act to allow workers affected by domestic violence (including those who live with a child affected by domestic violence) to ask for a short-term variation in their working arrangements (2 months or shorter). Workers can subsequently ask for their short-term variation to be extended or made permanent.

Employers must respond within 10 working days of receiving a request but can ask for proof the worker (or child) is affected by domestic violence and have a right of refusal. Grounds for refusal are specified.

If an employer fails to respond as required, the matter will be treated as an employment relationship problem.

Holidays Act

The Holidays Act to provide any worker affected by domestic violence (including a worker who lives with a child affected by domestic violence) with up to 10 days paid domestic violence leave.

To be eligible for leave the employee must have worked continuously for the employer for 6 months for an average of 10 hours a week, working at least 1 hour each week and 40 in each month. Leave may be taken sooner by agreement. Payment is average daily pay or relevant daily pay.

Leave can be requested whether the violence is currently occurring or occurred at some earlier time, even if that was before the person affected came to work for the employer.

The 10 days’ domestic violence leave is available only within each 12-month period and can’t be carried over to the following 12-months.

The Taxation (Annual Rates for 2017-2018, Employment and Investment Income, and Remedial Matters) Act 2018 amends:

  • The KiwiSaver Act by inserting a new ‘KiwiSaver status’ definition covering the information employees have to give to their employer (whether or not a member of an existing KiwiSaver scheme, deduction rate if already a member, whether on a contribution holiday or wish to cease deductions (by providing a non-deduction notice) or have chosen to opt out of a scheme).  New members must also provide information as required by the Commissioner for Inland Revenue and nominate a contribution rate.  The Commissioner is to provide the necessary form.
  • Replacing the terms ‘deduction notice’ and ‘remittance notice’, where these are currently used with ‘KiwiSaver status’.
  • Bringing the  Act into line with payday reporting by replacing ‘an employer monthly schedule’ where this term occurs (as with the requirement to notify the Commissioner of any new employee and any opt-out) with ‘employment income for payday reporting’  (or, a variation such as ‘in their employment income information’ aswhere employers have remitted insufficient money).
  • Amending the PAYE rules applying to deductions.

This year’s changes are:

  • Employees over the age of 65 (the NZ superannuation eligibility age) the KiwiSaver scheme (the former bar has been removed).
  • Employee contributions to the scheme of 6% and 10% are now permissible.
  • One year is now the maximum contributions holiday. A lesser contribution holiday can be taken.
  • An overpayment of an amount of an employer’s superannuation cash contribution the employee chooses to treat as salary or wages is excluded from the KiwiSaver Act’s definition of salary or wages.
  • Individuals to whom, before 1 July 2019, one or other of the following dates applies: 5 years after - first becoming a KiwiSaver scheme member/Commissioner for Inland Revenue first received a member’s contribution to the scheme/or, in the case of a transfer to a new fund, becoming a member of a complying superannuation fund – become ‘grandparented members’. For them the grandparented end payment date for withdrawals remains the applicable 5-year period or the date of qualifying for NZ superannuation, unless they tell their KiwiSaver provider the definition does not apply to them.
  • From the above, it appears KiwiSaver members not covered by the 5-year grandparented period or joining after 1 July 2019 will be able to withdraw their savings in limited circumstances only and will generally have to leave their contributions in until age 65.

Further Information

If you'd like to know more about these changes, register now for the Payroll Workshop 2019.

For further information and advice for your business, access the Business Central Employer Resource Portal here, or contact our free member adviceline on 0800 800 362.