Your business is growing and you know you need help, but what kind of help do you need? Hiring the right people can set you up for long-term growth, but making poor hiring decisions – or hiring the wrong kind of staff – can lead to headaches or even the risk of grievances. That’s why it’s important to understand different employee types before rushing to hire someone.
Employees are people who work for you. You provide them with an employment agreement and the equipment they need to do their job. Employees are entitled to a range of minimum standards, including holiday pay, receiving at least the adult minimum wage and paid public holidays with time off. You are responsible for registering as an employer with Inland Revenue and telling them your employee’s start date, deducting PAYE from their salary/wages and paying it to IR, and paying annual ACC levies.
Contractors are self-employed. They control what work they accept. You hire them for a limited time to complete a specific piece of work. Contractors sort out their own obligations with Inland Revenue and ACC, and provide their own equipment to complete the work they’ve been signed on to do.
Employees on fixed-term contracts are not contractors — they’re employed by you and entitled to all the same benefits as a permanent employee. Fixed-term employees are contracted to work for a specific period of time, usually to complete a big project or to cover the workload when other employees are on leave.
Fixed-term employees work consistently for a specific length of time. Casual employees work intermittently or irregularly as and when required (e.g. someone who’s called in for emergencies to cover for sickness). Both fixed-term and casual employees are entitled to all of the same benefits as permanent employees.
Fixed-term employees are paid members of your staff. Unpaid interns work for free, in exchange for gaining new skills and improving their employment prospects. You must provide interns with a written agreement that explains you are offering them an unpaid internship only, what the nature of the work will be, and how long the agreement will last.