Getting the right staff right now

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 vs contractors

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 Inland Revenue, 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.

Contractors vs fixed term employees

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 vs casual employees

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 vs unpaid interns

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. 

Test your knowledge: Who would you hire?

  1. You're a farmer wanting to hire pickers who will stay with you for the entire harvest season. You should hire a:

    a) contractor  b) fixed-term employee  c) permanent employee  d) casual employee

    : b.
    When you know you need extra hands for a set period of time (e.g. seasonal work), fixed-term employees are the right staff members to hire.
  2. Your advertising firm wins a contract to promote heart rate monitors in a series of six commercials. You need someone to write the ad copy, but no one on your staff has medical expertise. You should hire a:

    a) contractor b) fixed-term employee c) permanent employee d) casual employee

    : a.
    Because the work is finite, a contractor with specialised skills is the right person for this job.
  3. One of your full-time employees is about to go out on parental leave. You should hire a:

    a) contractor b) fixed-term employee c) permanent employee d) casual employee

    : b.
    Fixed-term employees can be legally contracted to work the exact length of your employee’s parental leave.
  4. You are a real estate agent who needs someone to put up “For Sale” signs at the properties you’re selling. Because you never know when you are going to get a listing, the work is steady, but irregular. You should hire a:

    a) contractor b) fixed-term employee c) permanent employee d) casual employee

    Answer: d.
    Casual employees are perfect for carrying out recurring but intermittent work.
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